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> X 







^PUBLIC POLICY 


BY 

WALTER F. (^OGLING / 

OF THE CHICAGO BAR 


PROMETHEAN PUBLISHING COMPANY 
37 METROPOLITAN BLOCK 
154 W. Randolph St. 

CHICAGO, ILL. 

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TABLE OF CONTENTS 


PAGE 

INTRODUCTION. vii 

I. The failure of Government. 

II. The constructive, integrating forces of Civilization are the 
representatives of the groups performing the Useful Work of Civili¬ 
zation. 

III. The Torture-Chamber of Public Opinion. 

IV. It will be impossible to clarify Public Opinion on the greater 
problems of Sociology until Public Policy is declared and enforced by 
the group representatives. 

V. The Lasting Peace. 

CHAPTER I. The Heroic Organization of Govern¬ 
ment . 1 

1. All forms of Useful Work are determined by their products to 
be either works of Service, Industry or Government. 

2. Public Policy is a product of Useful Work employed in co¬ 
ordinating the Useful Work of associating groups. 

3. Public Policy is concerned more with Service than with Industry 
and shapes the conventions which dominate in society. 

4. Government by the representatives of the district majorities 
becomes more and more incapable and inefficient as the specialized 
intelligence of the Nation becomes greater. 

5. The Lobby” is a revelation from the gods to show us how 
to establish and maintain an ideal Government. 

6. Upon the abolition of all district lines. Proportional Eepre- 
sentation will break up the electorate into the class-conscious groups 
whose representatives constitute a “Lobby” of all interests. 

7. An illustration of a method of operation of Proportional Rep¬ 
resentation. 

I. Proportional Representation at the Primaries. 

II. Proportional Representation at the Election. 

III. The ‘ ‘ Gerrymander. ’ ^ 

IV. The Aldermanic election in Chicago of April 6, 1915. 

8. Some practical lessons and observations concerning Proportional 
and District Representation. 

9. Under Proportional Representation the politician would have a 
secure and stable professional standing and revolutions would be im¬ 
possible. 

iii 




IV 


PUBLIC POLICY 


10. Proportional Eepresentation will give to all a definite rational 
interest in Public Policy, and is the first great and necessary social 
improvement without which no important advance in Public Policy 
is possible. 

11. The Heroic Organization of Government. 

12. Proportional Representation and Woman Suffrage. 

13. The Suffrage and the Alien Races. 

CHAPTER II. The House of Business Policy- 53 

1. A sudden and universally great demand for directed laborers 
arising from any adequate cause would be followed by industrial an¬ 
archy by reason of strikes, lockouts and labor troubles. 

2. In the transition from the medieval to the modern life Civiliza¬ 
tion lost an important and necessary organ of Public Policy, the 
Medieval Trades Guild. 

3. The fundamental principle upon which The House of Business 
Policy is founded is the fact that capitalists, as a class, cannot 
increase their profits without raising the fixed wages of laborers as 
a class. 

4. The electorate of The House of Business Policy is limited to 
the employers of Directed Labor in the State of Illinois, voting 
proportionately according to the amount of wages paid. 

5. The Senate of Business Policy is a council composed of employ¬ 
ers of labor elected from the body of the employing capitalists of 
the State vested with the legislative powers of The House of Business 
Policy. 

6. The substitute for the Trades Unions in The House of Business 
Policy will be The Board of Administration of Business Policy 
composed of the offiLcials and body of Directed Laborers. 

7. The Court of Business Policy consists of a certain number of 
experienced business men elected from the electorate of The House 
of Business Policy and by that electorate exclusively. 

8. In The House of Business Policy the whole of the body of 
active employing capitalists meets the body of Directed Laborers in 
a necessary functional relation. 

CHAPTER III. The Seventy-five Billion Dollar 
Issue of the Improvement Bonds of the United 
States. 72 

1. The idle capital and the idle lands of the United States. 

2. Industrial progress during the Nineteenth Century contrasted 
with the teachings of the schools. 



CONTENTS 


V 


3. Political Economy is the science of the absolute dominion in the 
Market of the Price-Lowering and Wage-Raising Monopoly by the 
final and absolute exclusion by Protective Taxation of all forms of 
Price-Raising and Wage-Lowerings Monopoly. 

(a) Increasing returns are necessary to the existence and 
continuation of all forms of associated production. 

(b) The laws of distribution according to the erroneous 
systems of economics adopted by Henry George and a ma¬ 
jority of the professional economists. 

(c) The control of the Market and the Two Monopolies. 

(d) The Economic Functions—Price, Gross Wage or 
Value, Capital and the Wages-Fund, Fixed Wage, Interest 
and Rent. 

(e) The functional control of Industry. 

(f) The function of Defensive Price-Raising Privileges. 

(g) The Democratic Direct Tax under the Constitution, 
—the Limited Singletax. 

4. The system of Defensive Privileges now maintaining the in¬ 
dustries of the United States is an inchoate form of the Singletax. 

5. With the vast increase in value and stability of the securities 
of the industries of controlling functional importance, agricultural 
land values would in time disappear. 

6. The value of urban lots is a real and necessary economic value 
resulting from the substitution of superior for inferior uses. 

7. Ground Rent, or the value of urban lots, is divisible into two 
funds, viz., The Accrued and The Accruing increments. 

8. The Accruing Increment of the price-lowering Ground Rent of 
urban lots blends with the Accrued Increment as new improvements 
in methods out of whose wage the Accruing Increment was paid, 
come into general use. 

9. The maximum selling value of land is the capitalization of 
the Accruing Increment. 

10. The stabilization of the Accrued Increment is the first step 
necessary to produce the maximum increase in the Accruing Incre¬ 
ment. 

11. The Accrued Increment can only be stabilized by appropriating 
it by the Singletax. 

12. The Accrued Increment of Urban Ground Rent constitutes the 
only natural and possible Standard of Valuation determining the 
number and value of the monetary price-units. 

13. No nation can maintain at par a greater volume of money of 
ultimate redemption than the sum total of Accrued Urban Ground 
Rents. 


VI 


PUBLIC POLICY 


14. The unit of Accrued Urban Ground Bent is the natural unit 
of valuation. 

15. The Singletax is the only method of taxation which is in 
accord at the same time with the precepts of the Gospel and with 
Business Policy. 

16. The attempt to levy The Singletax without compensation to 
the owners of the expropriated lands would ruin the industries of the 
United States and be impossible. 

17. Henry George did not understand the nature of Land Value 
and therefore his propaganda failed;—The Fallacies of George. 

Fallacy 1: That Bent arises from decreasing and not 
from increasing returns. 

Fallacy 2: That Bent is paid for the use of agricultural 
land. 

Fallacy 3: That Bent is a part of the tangible produce. 

Fallacy 4: That differences in Bent do not arise from 
differences in the active productive capacity of the differen¬ 
tial factors, but from differences in mere passive capacity of 
lands. 

Fallacy 5: That Bent is the excess of the produce of the 
land over what the same application can secure from the 
least productive land in use. 

Fallacies 6 and 7: Only the least productive labor pays no 
Bent; and, Only land on which the least productive labor is, 
or may be, employed commands no Bent. 

Fallacy 8: That the tax on Ground Bent cannot be 
shifted. 

18. In the Bicardian System as expounded by Henry George and 
the college professors there is not a single definition, formula or 
generalization that is true;—the new discoveries of the professors. 

(a) The formulas of the Bicardian Economics are all false. 

(b) The new discoveries of the Professors. 

(1) The doctrine of Differentials. 

(2) The doctrine that Cost does not enter into Price. 

(3) The discovery of the Two Monopolies,—Price-Low¬ 
ering and Price-Baising Monopoly. 

19. Bicardian Economics an illegitimate offshoot of the Public 
Policy of the 18th Century. 

20. Because of the fact that Ground Bent does not attach to agri¬ 
cultural land there will be no attempt to levy the Singletax upon 
the value of improved farms. 

21. The Seventy Five Billion Dollar Issue of the Improvement 
Bonds of the United States. 

22. The method of assessment of The Singletax by which the 
Improvement Bonds of the United States may be secured. 

23. The United States goes to war. 


INTRODUCTION 


I. The Failure Of Governments.—In all civilized coun¬ 
tries the business of declaring and enforcing Public Policy, 
or Government, has failed. In Europe the Great Powers, 
whose interests are identically the same, are in disastrous 
and deadly conflict with each other. As they hurl their 
populations, credit and hopes of the future into the maw of 
the most senseless and unnecessary war of all history, they 
evidence beyond any question whatever that, with them, the 
business of declaring and enforcing Public Policy is now in 
utter bankruptcy. 

The possibility of this atrocious war has long been ap¬ 
parent, and its threat has overhung Europe for a genera¬ 
tion. As with an insane person, some apparently trifling 
incident may cause a lucid interval to be changed into a 
state of raving fury; or, an equally trifling incident may 
cause the maniac to forget his madness, so the peace and the 
continuity of the Useful Work of the most powerful, indus¬ 
trious and enlightened nations of the Old World has, by a 
trivial incident, been transformed in an instant into a 
pandemonium of unlimited murder and raging destruction. 
If it be true that this terrible catastrophe was deliberately 
planned by any clique or faction of either of the opposing 
alliances, it is certain that the vast populations involved, 
hitherto engaged in the Useful Work of Civilization, did not 
intend it. And, if the Useful Work of Europe did not 
have this consequence involved in its activities, what Useless 
Work is it that necessarily bears such fruit ? For we know 
vii 


viii 


PUBLIC POLICY 


that nothing occurs in nature by chance; we do not gather 
grapes from thorns or figs from thistles. 

Although we, in the United States, are more fortunately 
situated, our better fortune is not the result of either our 
intellectual or moral superiority. We are the children of 
Old Mother Europe, and we are no better and no wiser than 
the populations of the Old Land. The fact that we are a 
homogeneous race, inhabiting a continent of our own, speak¬ 
ing one common language and having one similar body of 
laws and customs, gives to us certain advantages the Euro¬ 
peans do not possess. But, in this immeasurable security 
from aggression from without, we, in like manner, have 
failed to advance the Standard of Civilization. For, secure 
as we have been from the beginning, in the 140 years of our 
national life we should by this time have so enlightened 
mankind that the Useful Work of the world could no more 
he interrupted by wars than that our own powerful and 
prosperous cities could be overrun by Indians from the 
plains. 

Andrew Carnegie wrote a book, ‘‘The Triumphant De¬ 
mocracy,’’ the theme of which is that the European man, 
free in the United States from the bonds which shackle him 
in the older countries, proceeds to demonstrate that the 
fruit of liberty is the acceleration of all Useful Work; that 
freedom to such does not mean the license to go on a spree 
or to loaf in mischievous idleness, but to accomplish with 
greater power and success during the six days of the week 
what all men in all other lands are, under less favorable 
circumstances, striving to do. Useful Work is our National 
Game, or should be; with free and enlightened men the only 
possible Play is Useful Work. 

But there is a discordant note in the hymn of triumph of 
the democracy; a raucous, harsh and strident series of 


INTRODUCTION 


IX 


under- and overtones which have no place in any other than 
a Wagnerian '‘symphony/’ It may be that this sort of 
music is “Life,” but it is Life still dragging the hall and 
chain. 

For with us our Public Policy is as imbecile as that of 
Europe; if we do not suffer the same disastrous conse¬ 
quences from it, it is a mere piece of good luck. There is 
not a city council, a county board, a State Legislature, or a 
National Congress, that is not run, officered, managed and 
directed by a lobby of influences and persons wholly outside 
of the official membership. If it were not for these lobbies 
it would be entirely impossible to conduct the business of 
Government. When any question of importance suddenly 
arises, or in any way comes up for decision, we always find 
the governmental machinery unprepared, incapable of de¬ 
cision, and it is necessary to transform the nation into a 
vast debating society so that the puppets of the official or 
legal governmental machine may have their wires read¬ 
justed. There is no direct and continuous communication 
of the coordinating impulses, suggestions and restraints 
arising from the necessities of the daily Useful Work of 
our civilization which, like the accelerating and inhibiting 
stimuli from the sympathetic nerves and nerve-centers of 
the living body, can be ever present in the consciousness of 
Government. As it is with the Europeans, so it is with us: 
The work of Government is carried on hy men who are not 
directly concerned, and who are hut little acquainted, with 
the Useful Work of The People. In times of great trial they 
have always failed us, but in the ordinary affairs of life 
they fail us still more. There is this in common with the 
sort of civilization which exists in Europe and America 
that the men who do the Useful Work of the world do not 
govern the world. In Europe the business of Government 


X 


PUBLIC POLICY 


is conducted by the leaders of the hereditary nobility with 
the assistance of the representatives of the district ma¬ 
jorities; in the United States the business of Government 
is conducted by the Lobby with the assistance of the repre¬ 
sentatives of the district majorities. As things which are 
equal to the same thing are equal to each other, it appears 
that the Public Policy of our own country is the same sort 
of a species of worthless thorn as that which the trees of the 
European forest have made to rule over them, and it is 
bearing the same sort of fruit. 

n. The Constructive, Integrating Forces Of Civiliza¬ 
tion Are The Representatives Of The Groups Performing 
The Useful Work Of Civilization. —In our civilization 
every man’s place, wage and honor is determined by the 
work he does. By the work he does he is related to others 
and particularly to those who are associated with him in 
that work. By the work in which he is engaged he is trained 
and educated, and there is given to him a special “group- 
consciousness” arising from that work and association, 
which lifts him up above and beyond the purposes and the 
intelligence which are merely his by nature. He is robed 
in the ^‘toga virilis^^ of his proud American citizenship by 
being engaged in carrying on the Useful Work of the world 
as one of the essential groups of those so employed. In each 
of these groups there are definite relations which determine 
the principle of its association with others ; by these rela¬ 
tions and necessities they are bound together and consti¬ 
tute one living social organism. With these relationships 
and necessities the arbitrary containing political districts 
have nothing to do. Why should we, forgetting the proverb, 
reject the pudding and feast on the bag? As the little boy 
learns that six oranges, four peaches, two apples and one 
cocoanut make only six oranges, although they are thirteen 


INTEODUCTION 


XI 


^things/’ so we find that by bunching the groups within 
the confines of arbitrary election districts, that their chosen 
common representatives are mere legal abstractions, or 
merely titular representatives, having no relations towards 
the active concerns of the individuals of the groups which 
have had them thrust upon them except through the legal 
fiction which determined the manner of their choice. Intel¬ 
lectual and spiritual things are not limited by insensate 
boundaries; we do not live in districts, but in our work and 
with the people who work with us and who want what we 
want and who fear what we fear. By the mere accident of 
living in the same geographical neighborhood as that in 
which my body is placed no man approaches any nearer to 
me. Intellectually and morally we are often as far apart as 
the fixed stars from our immediate physical neighbors. But 
to the people who feel, purpose and think with us we are 
near, however far apart in time or place they may be. Geo¬ 
graphical juxtaposition is a mechanical, accidental relation; 
intellectual and moral juxtaposition, the juxtaposition of 
will, is a personal relation and is the only condition which 
makes for intellectual and moral solidarity and effectiveness. 

The representatives chosen from the political districts 
do not come out of the moral and intellectual life of the 
people; they represent only a legal fiction, an accident of 
circumstance. In their Useful Work the people disclose 
themselves to be an entirely different reality from the legal 
political absurdity. In their Useful Work they always elect 
as their leaders the most competent. No man spends his 
vote as carefully as he spends his dollar. We go carelessly 
to the polls and vote for a multitude of candidates about 
whom we know nothing and care less. In the political 
interrogation of the people by election districts the groups 
are disintegrated, their special intelligence and purposes 


xii 


PUBLIC POLICY 


baffled and negatived, and the resulting Consensus is not 
the Consensus of the group-consciousness of the same people 
according to the suggestions of the Useful Work which 
occupies them at other times. The political District-Con¬ 
sensus is merely that of the intelligence and purpose which 
a majority of the voters there confined all have as an iden¬ 
tical characteristic; that is, the intelligence and purpose of 
the least worthy element necessary to make the most worthy 
majority. But there is another election which goes on night 
and day, in which there is no distinction of sex or age, and 
in which every voter counts exactly for what he is worth. 
The child with its penny carefully scrutinizes the size and 
quality of its piece of candy,—^by its purchase it votes for 
the continued existence of that store and it votes its cent 
far more intelligently than its father ever cast his vote at 
the polls. From the child to millionaire every purchaser in 
the Market buys with the utmost intelligence he then pos¬ 
sesses, and in this election every one counts for exactly 
what his purchasing power is worth. By this sort of voting, 
the suffrage of trade, there is constituted an organization 
of INDUSTRY which would be ideally perfect if the ballot 
box was not stuffed by the fraudulent votes cast by those 
purchasers who expend stolen or fictitious values. Preda¬ 
tory privilege {i. e., non-defensive price raising privilege) 
stuffs the ballot of industry because the group-conscious¬ 
ness of those who are engaged in the Useful Work of 
society cannot, by reason of the disintegrating district lines, 
express itself and exercise its functional control over the 
members of the groups. It would be otherwise if the groups 
of those who carry on the Useful Work of society could be 
shepherded by those who are the functionally chosen leaders 
of these groups. They could infuse the group-consciousness 
into the members of the groups so that they would vote as 


INTRODUCTION 


xiii 


they worked, and not be stampeded on election day by a 
brass band or a leather-lunged political vaudeville per¬ 
former. Proportional representation is the only lasting 
basis of democracy,—that democracy which rises above 
and is supreme over its accidents, and is no longer a 
mere democracy, but a physiocracy governed by the laws 
of growth and not the caprice of the marginal intelligence 
of the disassociated group units. By proportional rep¬ 
resentation we will secure the heroic organization of 
society. We may have for our daily and common work 
of GOVERNMENT the services of those who now could only 
be brought forward in times of the greatest calamity and 
disaster. 

The useful, constructive work of Civilization is neces¬ 
sarily carried on by the operating groups, moved by their 
class-consciousness and guided by their special intelligence 
which under the direction of those who preside over the 
work of the groups gives a solidarity of force and effective¬ 
ness to them far beyond the individual capacities of the 
group units. If we disintegrate the groups and strain their 
units through the sieve of the marginal intelligence, all their 
effective, working capacity is lost. But, if the groups are 
not disintegrated, and, in the process of selection of their 
representatives the group-consciousness is permitted to play 
according to the spirit of the work in which the group-units 
are employed, the solidarity of the consciousness of the 
group as a unit of and in itself will be the reality which 
will express itself. The representatives thus selected will 
not be the representatives of the marginal intelligence, but 
they will be the representatives of the constructive, inte¬ 
grating forces of Civilization which are performing the 
Useful Work of Civilization. When assembled they will 
constitute a legitimate Lobby of all legitimate interests and 


xiv 


PUBLIC POLICY 


into that assembly the microbe of anti-social concern will 
have no power to enter. 

in. The Torture-Chamber Of Public Opinion. —In the 

primitive, crude criminal practice of early Europe a tor¬ 
ture-chamber was a necessary part of the machinery of 
every criminal court. Because our ancestors did not under¬ 
stand the laws of evidence they were unable to be satisfied 
with the findings of a court unless the guilt of the person 
accused was confessed by him. Witnesses might lie; hence 
unless the prisoner confessed, there was no feeling of cer¬ 
tainty that the court had decided properly. It was there¬ 
fore the practice, if the prisoner was believed to be guilty, 
to make him confess. The necessity of arriving in some 
manner at a formal conclusion blinded our ancestors to the 
absurdity of supposing that a conviction based upon a con¬ 
fession extorted by torture was valid, while a conviction 
based only upon evidence was not. It was only after the 
centuries had developed, by the labors of lawyers, the rules 
of evidence and orderly practice that the torture-chamber 
could be, and, in fact, was, abolished. 

Just as our ancestors were forced to add the torture- 
chamber to their courts because they did not understand 
how to proceed in a trial, so we in exactly the same manner 
put Public Opinion on the rack, we break it on the wheel, 
and we press it to death and in other barbaric and wicked 
ways torture it, because we do not know how to establish a 
universal consensus except by obtaining majorities from 
districts. As the conviction based on torture was a formal 
conviction which satisfied our ancestors’ sense of propriety 
and justice because they did not know how to obtain a con¬ 
viction in any other way, so the fiction of the ‘‘deestrict” 
as the imaginary reality that is represented, instead of the 
associated groups, satisfies us that we do, in fact, select 


INTKODUCTION 


XV 


representatives of the people. But the “deestrict’’ is a 
fiction of the law, there is nothing whatever in the actual 
Useful Work of society which corresponds to it. The repre¬ 
sentative of the ‘^deestrict^^ represents nothing except the 
corpse of Public Opinion, disemboweled and bloodless, 
‘‘hung, drawn and quartered.^' 

IV. It Will Be Impossible To Clarify Public Opinion 
On The Greater Problems Of Sociology Until Public 
Policy Is Declared And Enforced By The Group Repre¬ 
sentatives. —I have presented in this little book a series 
of propositions relating to Political Economy as the con¬ 
clusions of the Science of Public Policy. These are pre¬ 
sented merely for their academic utility as contributions 
to speculative science. So long as the present machinery 
of GOVERNMENT Operates there will be no house op business 
POLICY ; neither will there be an issue of the seventy-five 
BILLION DOLLAR IMPROVEMENT BONDS OF THE UNITED STATES 
SECURED BY THE SINGLETAX. Society will not be able to put 
on its “giant-strength^^ until it puts its giants on guard. 

It is, therefore, the conclusion which I wish to emphasize, 
that no important betterments, other than such as come by 
the slow diffusion of culture or the equally slow advances 
of industrial method, can be hoped for until we are enabled 
to enlist in the services of government the representa¬ 
tives of an entirely different Public Policy than those who 
are the outcome of mere district majorities. The fear of 
the Mob, ever present since the days of the French Revolu¬ 
tion, in the minds of the men concerned with the Useful 
Work of the world, will forever bar any attempt to exercise 
through governmental machinery made up of district rep¬ 
resentatives any extension of power beyond that which is 
barely sufficient to maintain physical order and peace. Dis¬ 
trustful of the machinery of government thus constituted 


xvi 


PUBLIC POLICY 


as the representatives of the group-consciousness necessarily 
are, the powers of government as an organized form of 
Useful Work will not be permitted to be exercised on the 
scale and in the manner that the necessities of our growing 
population require. This distrust is well founded. The 
greatest possible danger that could threaten society may 
arise either from the premature introduction of the single¬ 
tax or the discovery of a method of producing unlimited 
power without cost. Either of these would make every 
man a millionaire and fix upon us forever the present 
imbecile rule of the marginal character and intelligence. 

V. The Lasting Peace. —Peace is the uninterrupted 
continuity of all Useful Work in service, industry and 
GOVERNMENT. So far as the problems of government and 
INDUSTRY are concerned, the peace of the world can only 
be maintained by the program herein outlined. 


PUBLIC POLICY 


CHAPTER I 

THE HEROIC ORGANIZATION OF GOVERNMENT 

1. All Forms Of Useful Work Are Determined By 
Their Products To Be Either Works Of Service, Industry 
Or Government. —I am constrained by necessity, in pre¬ 
senting this little book to the reader, to invent and employ 
strange terms. This is the first time since the old Physio¬ 
crats became extinct that a booklet of any kind has been 
prepared on the subject commonly entitled “Political 
Economy.’^ Finding no literature extant, although tons 
of waste paper load the shelves of our libraries setting 
forth the morbid hallucinations of “Machiavellian’^ or 
Eieardian “Political Economy,” I set forth to explore a 
virgin continent hitherto unexplored, undiscovered and 
unknown. 

Every form of TJsefvZ Work is either a work of service, 
INDUSTRY or GOVERNMENT, or some sort of blending of 
one or the other of these. Just as the spectrum presents 
but three primary colors, out of which by blending 
all other color-effects are produced, so is it with Useful 
Work, First in order of time, and first in order of impor¬ 
tance, is that work which produces Man. Man as a product 
is sui generis, and must not be confused, or in any manner 
identified with Wealth, the product of industry, or with 
PuUic Policy, the product of government. What, then, 
shall we call that work which generates a man, raises 

1 


2 


PUBLIC POLICY 


the human infant to maturity, educates, trains, and fits for 
useful life, and afterwards by every form of ministration 
polishes by social intercourse, example, entertainment and 
instruction; stimulates by acts of heroism; which serves in 
sickness by the work of the nurse and physician, or in 
health by any care expended upon the moral, intellectual 
or physical nature, so that thereby a human being is in 
some sense produced? In the absence of any generally 
accepted term, I shall call this sort of Useful Work serv¬ 
ice. Service produces Man; Man being in existence then 
also produces Wealth, and this he does by exerting his 
powers upon the natural forces and elements apart from 
his species. When human power is exerted upon Man and 
directed towards the training of the human nature in some 
way, it is service. When the same power is exerted upon 
the natural media, or Land, so as to impress a character 
upon matter making it serviceable to human wants, the 
act is an act of labor or industry, and the product or 
matter impressed with the character which makes it serv¬ 
iceable, is Wealth, All men are constantly engaged in 
acts of SERVICE and of industry, and in these acts some 
acts are of greater functional importance than others, 
and the groups of individuals so engaged sustain some neces¬ 
sary relations to each other without which their work cannot 
be carried on. These relations are not capricious, but grow 
out of the functional character of their work, so that there 
must be some sort of order, or subordination of the work of 
one kind to another. Hence in addition to the Useful Work 
engaged in acts of service and in acts of industry there 
is of necessity another kind of Useful Work whose product 
is neither Man, nor Wealth, but Public Policy. This third 
order of Useful Work is government, and all men engage 
in it also, but the principles controlling these three primary 


HEROIC ORGANIZATION OF GOVERNMENT 


3 


kinds of Useful Work are as different in kind as their 
products are different in kind. As this essay is an inquiry 
into the relations between industry and government only, 
it is not concerned with the problems of service, and that 
order of Use fid Work, although primarily of supreme 
importance, is distinguished only to be eliminated from 
further general discussion. For service is primarily con¬ 
cerned with the origin, meaning and destiny of Life; its 
problems are those of Religion and Science in the broadest 
sense. The relations which exist between service, industry 
and government constitute the proud science of Sociology; 
those which industry and government sustain to each 
other belong to the humbler science of Political Economy. 
Political Economy is therefore that branch of the science 
of Public Policy which relates to the nature of the func¬ 
tions of GOVERNMENT in its relation to the functions of 
INDUSTRY. It is the Public Policy of Business Policy. 

2. Public Policy Is A Product Of Useful Work Em¬ 
ployed In Coordinating The Useful Work Of Associating 
Groups.— Just as all men engage in the work of service 
and INDUSTRY to some extent, although they may specialize 
in one of them, so all men engage in the work of govern¬ 
ment, although some, i.c., publicists, politicians and law¬ 
yers, specialize in it. As by industry wealth is produced 
and distributed, so by acts of government Public Policy 
is shaped and enforced. 

As INDUSTRY is the offspring of service, so government 
is the offspring of both service and industry. For those 
who are engaged in the two primary forms of Useful Work 
are employed in performing various sorts of work which 
are related to each other in certain relations of mutual 
dependence. All kinds of useful work are not equal in 
social importance. Thus all the work of service grows 


4 


PUBLIC POLICY 


out of the Family Life, and the maintenance and integrity 
of the Family is more important than any of the dependent 
works of SERVICE. So all forms of cooperative industry 
grow out of the act of Transportation, for without the 
physical movement of goods, no subdivision and association 
of labor would be possible. Next to the necessity of main¬ 
taining the roads and highways of travel comes the neces¬ 
sity of maintaining private property, and then the various 
forms of property rights by which, in the development 
of the civilized from the barbaric state, greater degrees 
of freedom have been attained. Civilization does not 
spring into existence with us fully formed, but like an 
embryo passes through apparently monstrous or foetal 
stages. During this process of growth the work which 
excludes practices and usages which interfere with the 
performance of the proper functions of the groups engaged 
in Useful Work, both as regards the individual work 
of a person or group, or of the groups in their relation 
to each other, is the work of government. This is accom¬ 
plished by that work which produces or manufactures a 
Public Opinion consistent with Public Policy. The poli¬ 
tician does not manufacture private or group-opinion; he 
is obliged to take the raw material of Public Opinion as 
he finds it. Out of the multitude of individual and group 
opinions he selects those which are consistent with the 
Useful Work actually carried on which can be enforced by 
the physical power of the whole community, and these he 
presents as “Public Opinion’’ which he seeks to enforce as 
“Public Policy.” This work is distinguished as much by 
what it rejects of existing opinions as by what it selects, 
and this selection and rejection is the process by which 
Public Policy is shaped or ‘ ‘ manufactured ’ ’ out of the raw 
material of existing knowledge and opinion. Public Policy 


HEROIC ORGANIZATION OF GOVERNMENT 5 

is primarily a Consensus, for it has a public character. But 
every consensus in which many share is not thereby a part 
of Public Policy. The politician, statesman, publicist and 
constitutional lawyer is obliged to take a sort of judicial 
notice of the totality of all necessary work and of the way 
in which these various sorts of groups engaged in necessary 
work are necessarily related to each other, and that primary 
physical necessity of relation must not be disturbed. So 
long as that is maintained lawmakers may indulge in con¬ 
siderable freedom, and society can tolerate easily many 
relatively trifling, although actually great abuses, which do 
not interfere with its serious business. Public Policy is, 
therefore, that Consensus of the groups functioning in the 
various sorts of Useful Work which is consistent with their 
functional relationships to each other,—a Consensus which 
is maintained by those who give to this matter their special 
attention and care, and by creating the Consensus command 
its obedience. By their labors a sort of a highway is con¬ 
structed connecting one group with another and they are 
the “road-makers” and “bridge-builders” of the common 
ways by which ideas travel rapidly from one group to 
another, while ideas which do not come over these common 
routes must travel laboriously and with great hardship 
“across country.” 

3. Public Policy Is Concerned More With Service Than 
With Industry, And Shapes The Conventions Which 
Dominate In Society, In Instruction And In Litera¬ 
ture. —This is because the work of service is primarily 
more important than the work of industry ; service pro¬ 
duces Men, and can always mould and control them. Hence 
Public Policy is always primarily concerned about gen¬ 
erally accepted theories of life, and often for purposes 
of its own manufactures and maintains an artificial theory 


6 


PUBLIC POLICY 


to blind the public, just as the horseman puts blinders on 
his horse. This development of “Machiavellian” Public 
Policy arises from the fact that the intelligence of the rep¬ 
resentatives of the district majorities is not great enough to 
maintain any policy consistent with the necessary Useful 
Work of mankind, so that in order to divert their attention 
some useful and constructive fraud and deceit is demanded. 
Thus at the beginning of the last Century Public Policy 
decreed that all popular interest in the political reorganiza¬ 
tion of society for the purpose of economic and social bet¬ 
terment must be discouraged. This was necessitated by the 
“Eeign of Terror,” when, in the French Eevolution, it was 
found that the general populace, excited by Utopian dreams 
of immediate expectancy, came more and more under the 
sway of the most vicious demagogues, and that the saner 
and more intelligent elements of society,—as represented 
by the Girondists,—were, under these circumstances, wholly 
incapable of competing with the demagogues. Hence it was 
necessary to teach the people the useful and necessary lie, 
viz., that population increases always faster than its ability 
to support itself, and that no reorganization of society is 
possible which will avoid the consequences of the inevitable 
over-population resulting from this supposed tendency. 
This useful lie has now been taught for a century and is 
still the keynote of all college economics. By it the popular 
interest in the possibilities of economic betterment by way 
of political action has been killed off, and the public has 
been kept at that work which it could be expected to under¬ 
stand so long as it could be “drugged” with the soporific 
doctrines of Malthus, Eicardo and Mill. For this purpose 
the professors in the colleges have laboriously struggled, 
and their text books, although utterly worthless as treatises 
on the science of Political Economy itself, have been splen- 


HEKOIC ORGANIZATION OF GOVERNMENT 


7 


did illustrations of the art of government and the methods 
of maintaining useful Public Policy during the period of 
government by the representatives of the intelligence of the 
least worthy elements needed to form district majorities. 

The universal spread of the Malthusian or Ricardian 
economics based on the absurd teaching that on account of 
the scarcity of fertile arable land the population of all civ¬ 
ilized countries was doomed to starvation and diminishing 
returns can only be explained as a necessary development 
of ‘‘Machiavellian’^ Public Policy. A century before that 
time a similar development of Public Policy filled the litera¬ 
ture of the 18th Century with the soporific doctrines of 
“Agnosticism” which aimed to put an end to the religious 
wars which desolated the 16th Century by teaching that 
religious doctrines were matters about which no man could 
arrive at certainty, and that, therefore, they were not worth 
fighting about. Whatever peace the world has had from 
religious and economic wars has been due and is now due 
to the prevalence of the Agnostic and Ricardian develop¬ 
ments of “Machiavellian” Public Policy. So long as the 
intelligence which can control Public Policy is as shallow 
as it is, it is impossible that deep water craft can navigate 
in it. The necessities of public order, of social peace and 
quiet, compel us in moving before the public really impor¬ 
tant questions, to be as careful as a man walking in a 
powder magazine. For this reason we are living in a 
Byzantine age of inanities. Public Policy alone smothered 
the religious disputes of the 16th Century by the Agnos¬ 
ticism of the 17th, and the revolutionary agitations of the 
18th by the Malthusianism of the 19th Century, and the 
publications which made this possible were legitimate devel¬ 
opments of no other sort of science or art than the science 
and art of government. 


8 


PUBLIC POLICY 


4. Government By The Representatives Of The Dis¬ 
trict Majorities becomes more and more incapable and 
inefficient as the specialized intelligence of the Nation 
becomes greater. —The representative of a district must 
be elected by a majority of the votes cast in the district. 
He must represent a Consensus which is arrived at by strik¬ 
ing out all those opinions, beliefs and judgments which are 
not common to all, and thereby losing the guidance and 
responsibility of all those who possess in any degree special 
knowledge, skill or worthiness of purpose. The real knowl¬ 
edge and worth of civilization does not consist of an “ aver¬ 
age,’^ for the “average’’ intelligence is lower than that of 
any man whose intelligence is standardized to that of any 
useful group-consciousness in any society of highly special¬ 
ized industries, and the more the intelligence of trained 
and educated men of different groups are by training and 
education specialized, the lower is the grade of mtelUgence 
which they all together have in common. If such men are 
compelled to form a consensus by the majority system by 
representatives from arbitrarily defined districts they will 
have no possible means of giving expression to the judg¬ 
ments, opinions and special knowledge which they possess 
as members of groups engaged in the various sorts of Useful 
Work and must submit to be led by the blind and the incom¬ 
petent, that is, by the intelligence which they have all in 
common, which is the intelligence of the weakest links in 
the chain, the least intelligent elements needed to form the 
most intelligent and stable majorities. 

When our ancestors emerged from the rule of the heredi¬ 
tary office holders, and first developed in the interests of 
themselves and their posterity what we may denominate as 
a social “backbone,” they established a government which 
>vas not unlike the nervous system of the first vertebrates, 


HEEOIC OEGANIZATION OF GOVEENMENT 


9 


very imperfect in its powers of coordination. For in place 
of the hereditary nobility they gave us the rule by the rep¬ 
resentatives of the district majorities,’^ so that the persons 
chosen as the organs of Public Opinion were not the repre¬ 
sentatives of the various groups engaged in Useful Work 
(who are really the containers of the intelligence of the 
community and the ones who ought to determine and en¬ 
force its policies) conscious of the natural and necessary 
relations of functional obedience and dependence upon each 
other which such work involves. The persons selected were 
merely those which represented the accident or chance 
which gives a majority to the policy approved by the least 
intelligent element needed to form the most intelligent and 
stable majority in a given district. By this method Public 
Opinion is arrived at by striking out all that body of 
knowledge and judgments which is not common to all, and 
that is taken to be the expression of Public Opinion which 
is merely the intelligence which is common to all. Since 
that intelligence which is common to all men is not much 
above that of the primitive savage, no two men, exercising 
this common intelligence, know the same identical things at 
the same time in the same manner and for the same purpose 
so as to form the same identical judgments about them at 
that time except with reference to a very limited number 
of simple matters. The purposes which impel men to Useful 
Work cause them to acquire a variety of different sorts of 
skill, knowledge and interests, and the knowledge and pur¬ 
pose which may be common to them all can only be that 

* They were little better, if any, than the hereditary nobility. A 
nobleman may have as much sense as another man. He is usuaUy 
educated to some extent, and he has a family tradition to help him. 
It took a thousand years of slow degeneration to reduce the French 
nobility to hopeless imbecility, while the French Assembly reached 
total imbecility in a few months under the control of the ward clubs 
of Paris! 


10 


PUBLIC'POLICY 


knowledge and purpose which is individually peculiar to 
those who have no more than that amount by which they 
are exceeded or transcended by all the others. The peculiar 
knowledge and purpose, therefore, which dictates the policy 
of majorities is not really even that which is common to all, 
but is merely the intelligence of the least intelligent neces¬ 
sary to form the Consensus. Those whose knowledge and 
purpose is superior to that of those who are least disposed 
to go with them is not the same as the others, and is not 
strictly a common knowledge which all have alike, except 
in so far as the more intelligent actually agree with those 
to whose caprices they are obliged to conform. The knowl¬ 
edge and purpose which is common is very different from 
that skill, knowledge and interest which accords with that 
policy which establishes the individuals and groups of those 
engaged in Useful Work in the relation of functional obe¬ 
dience to each other. The policy which accomplishes this 
will better accord with the work and wish of the marginal 
voters than anything he could himself think of or under¬ 
stand before it had been embodied in a concrete system 
before him, and even then, enjoying the benefits, he could 
not understand why, and how, it was that the condition was 
beneficial to him. Thus all the individual microscopic cells 
of protoplasm in their totality make up the body of a living 
man, just as the individual living men make up the body 
of ^ ‘ Civilization. ’' If they were to be disassociated and fall 
to the ground in a heap, and a ‘ ‘ vote ’ ’ could be taken among 
them to ascertain what they thought or wished, the policy 
that would result would be the Consensus of a multitude of 
microbes. It would not be the manifestation of any pos¬ 
sible sort of ‘ ‘ human ^ ’ intelligence or purpose. The *^Func~ 
tional Intelligence^^ which government makes possible is 
like the intelligence and purpose that is possible to the 


HEROIC ORGANIZATION OF GOVERNMENT 


11 


cells when organized into a proper body. The purpose and 
intelligence of that body is not the purpose and intelligence 
of the cells any more than the purpose and intelligence of 
GOVERNMENT, INDUSTRY and SERVICE, which is the three¬ 
headed monster “ Civilization, ^ ’ is the intelligence and 
purpose of the individual human units which compose the 
body of ‘ ‘ Civilization. ” We are lifted above our individual 
powers by our class- and group-consciousness, and stabilized 
in and by it. Every man, skilled in any sort of a calling, 
is a particular storehouse of the wisdom and knowledge of 
humanity which it has taken generations to produce and to 
which his individual contributions, however great, are rela¬ 
tively small. Our individual judgments are vacillating, 
uncertain and variable; our class- or group-consciousness is 
stable and intelligent when we interrogate that group-con¬ 
sciousness which we share with others similarly trained to 
any sort of useful work. Outside of this special skill and 
knowledge we have only guesses, superstitions, prejudices 
and crude opinions, so that the Consensus which is arrived 
at by majority votes of all the people within a given city, 
county, legislative or congressional district, state or nation, 
expresses merely that policy which the intelligence of the 
least intelligent, wholly untrained and undisciplined ele¬ 
ment needed to form a majority, permits. The Consensus 
is like those primitive vertebrates which possessed a better 
developed brain at the posterior portion of their spinal 
column than they did at the other end. Our politicians and 
publicists, deeply concerned about questions of Public 
Policy, must scrutinize with greater concern and attention 
the developments of thought among the least worthy por¬ 
tions of the population, and the less important the work in 
which that portion of the population is engaged, so much 
more important to the politician are the opinions of the 


12 


PUBLIC POLICY 


voters who constitute the “tail” of the monster. As with 
our inefficient form of government whose “brain” (a sort 
of a social “Pelvic” brain) consists of the assembly 
of the representatives of the marginal voters, so also we find 
that the similar primitive monsters (having an imperfectly 
developed cerebellum) were imperfect in their coordina¬ 
tion. Thus the animal, not unlike our government, would 
be awake in various degrees of sensibility and purpose¬ 
fulness on one side, and asleep in various degrees of insen¬ 
sibility on the other, never having the same purpose 
in all of its members, and existed in a chronic state of 
“unpreparedness”. Hence (as the Persian Empire was 
conquered by Alexander and the world by Rome) it was 
easily destroyed by the smaller, but better coordinating 
animals, which had in their skulls a brain a trifle larger 
than the rudimentary brain, which we still retain as the 
“Pelvic Plexus,” at the other extremity of their vertebral 
columns. 

Public Policy, under the rule of the representatives of 
the district majorities, shapes the course of all instruction 
and the conventions which dominate society just as much as 
the rule of the most intelligent itself would do if in control. 
There necessarily comes a time when the decline in the 
average or common intelligence resulting from the special¬ 
ization of training manifestly becomes such that the repre¬ 
sentatives of the marginal voters are incapable of being 
guided by the requirements which are made by the neces¬ 
sary Useful Work of the community and are wholly unable 
to interpret them. This manifests itself in two conspicuous 
ways: (1) by the incompetence and stupidity of the pub¬ 
licists; and (2) by the extravagant development of the 
Lobby. As to the first of these, it is evident that the public 
men of our time are in every way inferior to the public 


HEROIC ORGANIZATION OF GOVERNMENT 


13 


men of the earlier generations when there was less special¬ 
ization of training and the knowledge common to all was 
the old log cabin kind. In the days of the weekly news¬ 
papers the intelligence and public spirit of the citizens 
were greater and better than they are now in the time of the 
daily blanket sheets,—the more books and pamphlets and 
publications are multiplied the more rapidly declines the 
general level of intelligence. The daily newspaper makes 
its money out of its advertising. In any sort of work that 
is intelligent, instructive and interesting there is money for 
somebody, and the daily paper would not dare to spread 
information about these matters before its readers for fear 
of losing or offending some possible or actual advertiser. 
Hence it collects only garbage and gossips about trifles, 
for there is no necessity, arising from Public Policy, which 
compels these representatives of the least-intelligent-read- 
ers-needed-to-make-up-the-greatest-advertising-circulation to 
do anything else. The newspaper is, however, always a 
spokesman for the Public Policy of the period, and the 
gradually declining level of intelligence and character in 
these publications coincides with the declining level of 
intelligence and character in the representatives chosen 
from the congressional and senatorial districts, and the 
inferior type of statesmen generally produced for any pur¬ 
pose. This inferior intelligence and purpose also manifests 
itself in the instruction and caliber of the teachers in the 
schools and colleges and in the “scientiflc’’ publications, 
the formal treatises and magazines ostensibly devoted to the 
discussion of public questions. Public Policy controls all 
the broad roads and common highways of the Consensus of 
the age; on all its bridges an imbecile Public Policy stands 
on guard by its duly commissioned representatives. The 
reason our publicists, politicians, statesmen, scientists, 


14 


PUBLIC POLICY 


clergymen, and even artists, are in the main so utterly 
mediocre is that they are the fruits of the Ward Club, the 
exponents of that sort of Public Policy which exhibits to us, 
not the intelligence of the most intelligent, but that classifi¬ 
cation and type consistent with the purpose and the intelli¬ 
gence of the least intelligent and least worthy elements 
needed to form the most stable district majorities. The 
college professors put forth treatises of spurious Machiavel¬ 
lian science just as the local politician hands out local 
“bunk”; all of them are the fruit, leaves and branches 
from the same trunk, the Public Policy of the marginal 
intelligence. They were the spokesmen of the Public Policy 
of the Marginal Intelligence who in Europe nursed the 
European War into being, while in our own country the 
imagination cannot conceive the evils which their folly and 
incapacity may yet have in store for us. 

But as the declining level of the general intelligence as 
manifested by the Consensus falls most rapidly with the 
increase in special education and training, we find that not 
only do the people become less intelligent, apparently, the 
more they are educated, but this lack of intelligence and 
responsibility becomes so marked that out of the feeble 
hands of these Merovingian rulers of the district majorities 
the representatives of the functional or class-conscious 
groups (the “Interests”) have already snatched the scepter 
of GOVERNMENT, and have begun to establish a dynasty 
which will succeed the incapable representatives of the mar¬ 
ginal intelligence. This is the “Lobby” which everywhere 
surrounds, enmeshes, encysts, checks, baffles, directs, cor¬ 
rupts and paralyzes the anti-social and obsolete govern¬ 
mental machinery, treating it constantly as the vital forces 
of a living body treat some foreign substance, a bullet for 
instance, embedded in the body which cannot be removed. 


HEROIC ORGANIZATION OF GOVERNMENT 


15 


As the intelligence of the popular Consensus becomes less 
and less able to coordinate itself with the necessary Useful 
Work the power of the Lobby rises, so that the more highly 
specialized the intelligence of the citizens of the United 
States becomes by reason of acquired skill in their various 
professions and trades the lower, more irresponsible and 
worthless becomes the nature of that popular Consensus 
which is able to maintain itself by numerical majorities, and 
the more we are disgusted with it. Unless the rule by the 
representatives of the district majorities is abolished while 
yet the Consensus has intelligence enough to do it, nothing 
short of a revolution, conquest by a foreign nation or com¬ 
plete surrender to the Lobby will release us from this 
ignoble and absurd subjection. 

5. The ‘"Lobby” Is A Revelation From The Gods To 
Show Us How To Establish and Maintain An Ideal 
Government. —There is an interesting legend concerning 
Elias Howe, the inventor of the Sewing Machine, that he 
went to bed one night despairing of success in his under¬ 
taking because he could not make a machine which would 
sew with the hole in the hig end of the needle. He slept, 
and the gods send him a dream. He thought he was cap¬ 
tured by cannibals; they had tied him to a stake and were 
about to roast him, and as a preliminary torture they 
danced a wild war dance about him, shaking in his face 
their long spears. He awoke in a cold sweat and remem- 
bered that the spears of the savages all had the holes at the 
small ends! They were in fact sewing machine needles! 
Here then was the idea he sought, and the Sewing Machine 
came into existence. It is in very much the same way that 
the ideal form of government has been revealed to us, 
although its first appearance is under a similar threatening 
guise. It is the ‘ ‘ Lobby.'' 


16 


PUBLIC POLICY 


From the beginning of time politicians, courtiers and 
diplomats have always been liars; by lies, deceits and frauds 
they have maintained themselves and still do so. This is 
primarily due, no doubt, to an hereditary weakness common 
to all men; but the politicians, like Falstaff, have more 
“Adam^’ in them than anybody else. Machiavellian poli¬ 
tics, whose maxim is Anything to win/’ is the traditional 
policy of those who must accomplish immediate results. 
^^Put not your trust in princes/’ said the Psalmist and 
Cardinal Wolsey, and all politicians are compelled to 
promise things they know they cannot accomplish,—their 
promises are as dependable as a party ^‘platform.” But 
there are some businesses which are of such importance that 
they cannot afford to depend upon these broken reeds; they 
therefore organize so as to be able to compel, coerce, seduce 
or bribe the tricksters who would otherwise deceive or 
defraud them. Thus there is brought to bear on the persons 
who constitute the legal fiction of government the pres¬ 
sure of those of the representatives of the powerful class¬ 
conscious groups who are sufficiently concerned to be 
compelled to busy themselves about Public Policy. In this 
way the governmental fiction which the law has instituted 
is brought by necessity face to face with nature ^s reality,— 
certain of the representatives of the class-conscious groups, 
some, but not all, of the real Masters of Public Policy. 

Leading from the rear of the medieval castle or earlier 
Viking House was a walk screened by leafy foliage which 
was called the ^ ‘ Lobby,from “laube,’^ a leaf. This walk 
led to the common public vault or “privy,” to which in the 
course of the day the courtiers attending the prince would 
have recourse. Hence it was about the approaches to the 
“Voiding Lobby” that the suitors waited with more or less 
patience for the politicians to appear to whom they pressed 


HEEOIC ORGANIZATION OF GOVERNMENT 


11 


their suits.* From this humble beginning the mighty 
‘‘Lobby’’ has risen until now it is the Government in all 
but name,—that is, if not the “king” it is the “Mayor of 
the Palace” and will in time “shave” the head of the help¬ 
less monarch whom it serves and pack him off to a “monas¬ 
tery” as Hugh Capet did to the last of the Merovingians. 

In our society it is always necessary to send an important 
“delegation” down to interview the legislators when any 
proposed popular legislation is impending; we all under¬ 
stand that the legislature would not dare on its own initia¬ 
tive to enact anything which had not been persistently 
demanded of it by the “Lobby.” All sorts of volunteer 
organizations help things along with the governmental 
machinery, and the “Lobby” consists of all of these, but 
chiefly of the trained mercenaries employed by the powerful 
business interests. The minor interests come down and 
button-hole the representatives of the “deestricts” once in 
a while, but they are not all the time on the watch, and thus 
the members of the legislature have many a chance to “slip 
over” some little deal, and to pick the pockets of some unim¬ 
portant class of victims, in which the mercenaries on guard 
have no concern. The “Lobby” in fact is only composed 
of a few of the special interests, the ones that are the 
strongest and the richest, which, but for their presence, 
would afford the best “plucking” for the district represen¬ 
tatives, and which also have some special “ax to grind” 

* In Shakespeare’s King Henry VI, Part II, Act IV, Scene 1, the 
Duke of Suffolk is captured by a former job-hunter turned revolu¬ 
tionist who in rage refuses ransom and beheads him without mercy. 
Suffolk pleads for his life, telling that he had once ** endorsed his 
captor ^s ‘ ^ application ^ *: 

**How in our voiding lobby hast thou stood. 

And duly waited for my coming forth? 

This hand of mine hath writ in thy behalf. 

And therefore shall it charm thy riotous tongue.*^ 


18 


PUBLIC POLICY 


there. As the members of the legislature and the officials 
of government generally represent merely the intelligence 
and worth of the least worthy elements needed to make up 
the district majorities they are wholly unable to decide of 
themselves what is, or what is not, Public Policy. If they 
do anything which is against the judgment of certain pow¬ 
erful special interests which have access to the organs of 
Public Opinion, a storm of abuse and denunciation breaks 
forth upon them, and thus they are made to understand that 
they are not really the exponents and organs of Public 
Policy, but constitute an obsolete legal fiction only. The 
public official cannot be instructed by his party, or by the 
arguments and policies advocated in the campaign which 
elects him in anything of importance, since the intelligence 
and moral worth of the marginal intelligence is such that 
it is well known that promises are not to be kept; that they 
are so indefinitely worded that they mean nothing, and it 
is impossible to interrogate the whole people in any matter 
beyond the intelligence of the marginal voters. Hence the 
popular oracle can never give a satisfactory answer to such 
unskillful questioning, for it must be remembered that in 
consulting an oracle, the utility and directness of the 
response is wholly due to the form of interrogation, and the 
nature of the medium through which the response is elicited. 
When we interrogate the wisdom of humanity through the 
feeble intelligence of the marginal voters we will dip up 
out of the sum of wisdom available by more intelligent 
methods just as much as our little tin cup will carry and no 
more. We should not quarrel with the district representa¬ 
tives because they are officially dunces, for as individuals 
they may be of more than “average^’ intelligence, just as 
noblemen may be, and sometimes are. Some of the men 
now active in public life, whose public achievements do pot 


HEEOIC OEGANIZATION OF GOVEENMENT 


19 


distinguish them from the others, are nevertheless men of 
the very highest ability, and could, if they were properly 
commissioned and better understood the nature of Public 
Policy, surpass any of the famous names of history. But 
they live in an age when by reason of the increase of spe¬ 
cialized intelligence and training, the marginal intelligence 
is lower than it was in the heroic days when great issues 
made great men. Accident may put into public life or 
public office able men. But such is not usually the case. 
Most of them are cunning, or conceited, or stupid, or shal¬ 
low and well-meaning and irresponsible persons. With all 
their affability and pushing energy which leads them for¬ 
ward to seats at the head of the table, they ordinarily know 
nothing whatever about the primary business which they 
are supposed to attend to. It is impossible to argue ration¬ 
ally with the most of them and to hope that mere persuasion 
and common sense, not backed up with some show of force, 
would move them or could instruct them. The time is short; 
action must be obtained. Hence they are necessarily bribed, 
or in some way diverted or corrupted from what otherwise 
would have been their course. Some one once accused 
Horace Walpole of bribery and corruption, and he an¬ 
swered: ‘^The British Government is founded on corrup¬ 
tion!^^ a statement that is true of all governments now or 
hitherto existing at all times and at all places! It is never 
possible to get any useful, constructive measure, one that 
accords with a wise Public Policy, through the narrow, con¬ 
tracted, opinionated, prejudiced, ignorant and often dis¬ 
honest minds of the representatives of the district majori¬ 
ties, unless in times of great danger, except by force or 
corruption or by interminable, expensive and wearisome 
agitation. By reason of their inability to take the initiative 
and their inability to respond, these representatives mani- 


20 


PUBLIC POLICY 


fest themselves to be fully as much a mere legal fiction as 
the hereditary nobility, and history shows them to be far 
more incapable. A general appreciation of this has been 
shown by the widespread agitation for the Initiative, Refer- 
endum, Imperative Mandate and the Recall, and these 
hopeless admissions of the perpetual incapacity of our dis¬ 
trict representatives and public officials are presented as 
reforms in government! But they are negative checks 
only on dishonesty and incapacity, and the only relief pro¬ 
posed is another appeal from these district representatives 
to the diminishing and dwindling intelligence that is com¬ 
mon to all. What we want is, not schemes to trap or 
restrain a weak, inefficient and corrupt government, but a 
method by which we can secure a strong, efficient, honest, 
wise and liberty-loving organization of the representative 
exponents of Public Policy which can understand and inter¬ 
pret the work of service and industry and be a real 
GOVERNMENT according to the purpose and judgment of the 
most intelligent. 

The ‘ ‘ Commission ’ ’ as a form of government is an aban¬ 
donment of the representative principle and in substance is 
a reversion to an elective oligarchy, little different from an 
elective monarchy except in the number of persons vested 
with authority. It is not a republican form of government, 
because not representative, and is in spirit at least con¬ 
trary to the Constitution, written and unwritten, of the 
United States. But the popularity of this idea is another 
evidence of the restless searching of Public Policy for some 
effective instrument other than the legal fiction of our 
obsolete district system of representation. 

In other words, we must perfect the Lobby and make it 
the Government! The representatives of all interests, 
when they are assembled, will watch over each other 


HEEOIC ORGANIZATION OF GOVERNMENT 


21 


and force through measures necessary to the elaboration of 
Public Policy. It will not be necessary to watch them, or 
to muzzle or suspect them. For each interest will be sel¬ 
fishly watchful and eager to do what it can in its own 
behalf, and the members of the several groups represented 
will be moved by a common, equal and like intelligence and 
purpose to hold their representatives to their task. The 
selfish interests of all the groups are the only social powers 
able to select representatives who will always be both intel¬ 
ligent and patriotic; we only need to have all op them 
there, not a few of them only. They will know exactly in 
what relation they stand to each other, for their interests 
will be to maintain the functional relations of the groups 
engaged in useful work, something the present repre¬ 
sentatives could not understand if they tried. 

6. Upon The Abolition Of All District Lines Propor¬ 
tional Representation Will Break Up The Electorate Into 
The Class-Conscious Groups Whose Representatives Con¬ 
stitute A Lobby Of All Interests. —^Proportional Repre¬ 
sentation is merely a tool or instrument which consists of a 
method of choosing representatives without any restraint on 
the expression of the group-consciousness. The group- 
consciousness already exists; but, because it has been unable 
to express itself as a factor in the open determination of 
Public Policy, the various groups which possess a class- 
consciousness are not defined; the individuals do not know 
their groups and the groups, therefore, are not aware of 
their own powers and have no well developed policies. The 
inability of the groups to function politically as such is due 
to the fact that they cannot elect within the district,—^they 
are walled out from each other. If they could elect they 
would be heard from. I am aware that I have certain opin¬ 
ions, and I occasionally meet with a man who agrees with 


22 


PUBLIC POLICY 


me; but just how many there are who think that way, and 
where they are to be found, I do not know. Again the 
opinions that I form are shaped in the dark; if I knew 
more about the actual opinions of others mine would be 
modified. In political life I am represented by a dummy; 
for all practical purposes he might as well be a wooden 
Indian or an automaton, or a lamp-post marking the inter¬ 
section of the geographical lines which constitute the 
‘^deestrict.’^ For the district representative does not repre¬ 
sent men literally, but an area, a defined space on the map 
bounded by certain imaginary lines. These lines or terri¬ 
torial boundaries which defiine a legal district do not define, 
and have nothing whatever in common with, the divisions 
of purposive groups in thought and opinion which in their 
totality constitute that Public Opinion the Governmental 
Official is supposed to represent. The different purposes 
and objects which characterize the groups are the lines of 
division which separate them from each other, not the lines 
on the map or mere spacial distance. In remote times, 
before printing, railroads and telegraphs, and before the 
Post Office existed, far separated people could be supposed 
to have little in common and people living in the same 
neighborhood could have been supposed to have common 
local opinions. But this state belongs to the primitive 
medieval arrangement of things, before the instrumentali¬ 
ties existed which now standardize and specialize the opin¬ 
ions and purposes of far-separated individuals to the class- 
knowledge, judgment and purpose of a group having a 
common specialized training and experience. The man who 
represents me is the man, wherever he may be, who thinks 
the same as I do because, having the same or better knowl¬ 
edge than I have, he wants the same thing done that I do. 
These individuals may be so scattered about that a suffi- 


HEROIC ORGANIZATION OF GOVERNMENT 


23 


cient number of them could never be collected in one district 
to form a conscious purposive group which could effect 
results politically, and therefore they never find each other. 

The object of Proportional Representation is to permit 
the group-consciousness to form and express itself by 
detaching itself from the miscellaneous individual opinions 
with which it is entangled. As the individuals who will 
form the groups are scattered about in all directions from 
each other, no district system can contain them, and the 
arbitrary lines of the districts cut the groups to pieces and 
disfranchise all their members as such, by depriving them 
of the power to express their group-consciousness. Hence 
the fatuous ‘‘Minority Systemof representation in the 
legislative districts provided by the State Constitution, 
which was the outcome of an agitation for Proportional 
Representation prior to the convention of 1870, does not 
permit the group-consciousness to express itself at all, and 
merely aggravates the evils of the district system. For it 
permits corrupt interests to maintain in public life persons 
whom even the least intelligent element of the district on a 
majority vote would have rejected, but does not permit the 
free operation of groups having equal intensity of interest 
to oppose .them. The reason that district-minority repre¬ 
sentation is a mere haven for “ crooks is that any man may 
be a “crook,’’ but to form a group-consciousness requires 
a larger number of persons than the more worthy groups 
could produce in a given district except occasionally on 
local issues. 

The reason the great political parties tend to become 
meaningless political fossils, until some great social con¬ 
vulsion necessarily puts in temporary control the repre¬ 
sentatives of the purpose and thought of the functionally 
controlling groups, is that with the increase in specializa- 


24 


PUBLIC POLICY 


tion of knowledge and skill the stock of knowledge and the 
purpose common to all diminishes, and thus the great party, 
originally instinct with the life and purpose of a noble and 
useful group is gradually drained of its vitality, i.e., the 
purpose and group-consciousness that generated it. The 
capricious purpose and diminishing intelligence of the mar¬ 
ginal voters, left to themselves and deprived of the elevat¬ 
ing influence of the foreign group-will and consciousness 
which temporarily lifts it above itself and gives to it a white 
heat of intensity beyond its powers to maintain, is not able 
to conserve a Public Policy consistent with the original 
purpose and character which created the party in its heroic 
age. “In the dull, piping times of peace,’’ the great groups 
in which are contained the wisdom and heroism of the race 
are submerged or are imprisoned by the legal fiction and 
cannot be heard. But in times of great peril, or in times 
of social convulsion (if the capacity for engaging in Useful 
Work exists), they can make themselves felt. Then the 
nation rises, as Milton has said, with a certain air of puis¬ 
sant majesty, and arrays itself in the consciousness of a 
supreme controlling function, as an army in uniform. This 
is the patriotism which is real and which can not be simu¬ 
lated by the hypocrite and the time-server because it is a 
solidarity of purpose and consciousness which is above the 
normal consciousness expressing itself through the marginal 
voters, and therefore the poet said: 

‘ ‘ ’Twere worth ten years of peaceful life. 

One glance at their array.” 

The heroic organization of society can be made its per¬ 
petual organization, and by it humanity will put on its 
giant strength, for we, as the Eddas tell us, “are of the 
race of the giants.” Those withered and disembowelled 


HEEOIC OEGANIZATION OF GOVEENMENT 25 

“dwarfs,” who are killed by direct exposure to the rays 
of the sun, will no longer manipulate our political machin¬ 
ery or plot to keep us in their sordid uniform of rags. By 
the magic of district divisions we are chained and bound, 
as the Wolf in the Norse Mythology was fastened by that 
mighty chain which no one could see, and by that chain 
held fast in the gloom of darkest Niflhel. But by breaking 
this chain we will escape to the light which is the purpose 
and intelligence of the spontaneously forming groups of the 
higher and controlling functions of Useful Work, and this 
light has the magic power to kill off the dwarfs as a species 
and substitute in place of them heroes, statesmen and 
Masters of Public Policy. 

A “hero” is merely a “big man.” Every man has cer¬ 
tain desires and opinions concerning Public Policy, even 
if he is not disposed to say or to do much to bring it about. 
But there are others in whom these desires are so intense 
and so persistent that they will never cease in their efforts. 
These are the “heroes” and the “liege lords” of the others. 
The man who can command my enthusiastic obedience is 
the man who lies awake nights, when I am asleep or 
thoughtless, planning to do for me what I am unable or 
too careless to do and which is the very thing that I know 
that I want done. He is my lord and master, because he is 
an heroic projection of myself. Among the heathen it is 
not so, for they who have dominion lord it over them by 
restricting their liberty, taking away their property, and 
by making them do what they do not want to do. But the 
true nobility, the real lords and masters of men, are those 
who administer the functions which serve and thereby main¬ 
tain the functional control in all Useful Work. When our 
remote ancestors came out of the woods and fought their 
way into the possession of strange lands in Europe, they 


26 


PUBLIC POLICY 


presumably had over them competent leaders. They divided 
up the conquered territory, and the subordinate official, 
charged with keeping the peace in the territory assigned to 
him because a “Life-Tenant,^^ a term we still retain as a 
military title, “lieutenant.’^ After a while, when there was 
less need for fighting men to hold the offices, those who 
held the offices made them hereditary and excluded all com¬ 
petition for public office by establishing a “legal” or ficti¬ 
tious nobility and a fictitious commons. But the legal no¬ 
bility, whether they are the holders of the hereditary titles 
or are the representatives of the intelligence common to all, 
are not genuine. We want lords over us who are heroes, 
and every group knows who its heroes are. Generous 
Nature will produce them and exhibit to us in an unend¬ 
ing series, the “Big Brothers,” who are always doing the 
real work of the world and carrying all of its serious respon¬ 
sibilities. Peace has its heroes, greater than the hardy 
men who serve in times of danger. They are always with 
us, and our Public Policy knows them not. Around them 
the battles of the common life rage, and amidst the com¬ 
batants there is many an Ajax in the field upon whose 
mighty shield the blows of circumstance fall harmless. But 
if we elect Ajax to office we blind him with the marginal 
fog; he is compelled to fight our battles in the dark, and in 
the dark we trail after him, helpless and inefficient. It is 
ignoble to be compelled to skirmish in this manner; a hard 
fortune which, not the gods, but our own folly has sent 
upon us. The Marginal Intelligence populates this dark¬ 
ness with unwholesome things, vast ill-defined monstrosities 
and vampires. Nightmares of Ignorance and Chimeras of 
Fear. We shall banish them as soon as we cease to be 
led by the blind, or cease to let the fools do our thinking 
for us. 


HEROIC ORGANIZATION OF GOVERNMENT 


27 


7. An Illustration Of A Method Of Operation Of Pro¬ 
portional Representation. —Advocates of Proportional 
Representation have generally failed to grasp and present 
to their hearers the nature of the plan. They waste their 
time in explaining and developing mere arithmetical nice¬ 
ties. They have generally failed to perceive its essential 
utility. The real value of Proportional Representation lies 
in the fact that it is the only means of establishing the 
heroic organization of Government and that it is the only 
possible means of escaping from the rule of the marginal 
intelligence. By it Public Policy rides in a chariot modeled 
after that of the Ancient of Days in Ezechiel and Milton, 
whose parts are living creatures with eyes and voices “as 
the sound of many waters,—“wheels within wheels in¬ 
drawn.^’ It is the romantic and essentially aristocratic 
form of government. It is the means, in fact, by which we 
make the political machine truly representative of the vast 
and many-voiced democracy, rational, powerful and master 
of itself. Many spurious forms of so-called “Proportional 
Representation ^ ’ have been presented. Thus our ‘ ‘ Minority 
Representation” is one; others are the elaborate plans for 
securing second- and third choice expressions of selection. 
We care little for the individual opinion; we value it only 
as an expression of the group opinion and judgment. While 
there may be many ways by which the group judgment may 
be free to act, I will present as illustrating the principle, 
two methods, based on the Hare and List Systems, one to 
be used at a primary, and the other at the general election 
for the office of alderman of the city of Chicago. These 
methods would apply just the same to the choice of mem¬ 
bers of the Common Council, of the County Board, of the 
General Assembly, and to the selection of Representatives 
and Senators in Congress. We may suppose, however, that 


28 


PUBLIC POLICY 


if the electorate of Chicago were ever intelligent enough to 
adopt Proportional Representation that the machinery of 
the County and City governments would be consolidated, and 
that all the authority of the law would be vested in the rep¬ 
resentatives of the groups, as is done in Switzerland, with¬ 
out any executive head other than that of their own choos¬ 
ing. The political parties which I will assume to be oper¬ 
ating will necessarily, for our first election, be the parties 
which now represent “the Peepul” of the legal fiction—^the 
various shades and developments of Public Opinion as ex¬ 
pressed by the intelligence of the least intelligent elements 
needed to make the most intelligent majority,—i.e., the 
Democrats, Republicans, Progressives, Socialists and Prohi¬ 
bitionists. Although these parties now mean very little, 
yet the Party System is the only way in which the group 
consciousness can find expression, and whatever defects our 
present parties may have are to be attributed wholly to the 
district system of representation. The parties are as effi¬ 
cient as they are permitted to be, and they represent and 
faithfully carry out that feeble modicum of sense which is 
common to all,—a residuum which is daily growing both 
actually and relatively less as the intelligence of the spe¬ 
cialized groups becomes greater. Consequently we will pro¬ 
vide no means by which a single individual can become a 
candidate for membership in the Board of Control of this 
city except as the candidate of a party which has nominated 
a full ticket. 

I. Proportional Representation at the Primaries. 

1. Ward lines have been abolished, and the time ap¬ 
proaches when the individuals of the different parties who 
seek the nomination of their parties and who aspire to be 
exponents of Public Opinion and the guardians of Public 


HEEOIC ORGANIZATION OF GOVERNMENT 


29 


Policy as the nominees of the essential groups of their 
parties announce their candidacies and prepare for the pri¬ 
maries. Each party is to nominate, we will say, 35 candi¬ 
dates for the office of Alderman who are to be elected from 
the whole city at large on the proportional basis. Party 
policy will control the local distribution of these candidates, 
but so far as the restriction upon residence is concerned it 
would only be necessary that they live in the city,—other¬ 
wise they could all live in the same building. 

2. As many as choose announce their candidacies and 
prepare their petitions which may be required to contain a 
number of signatures equal to a certain percentage of the 
vote of the party at the last preceding election. These 
petitions are to be filed within a certain period, and the 
names of the candidates are to be printed in alphabetical 
order on the party ballot without reference to priority of 
filing. 

3. At the primary election each voter may vote once for 
35 candidates, or 35 times for one, or seven times for five, 
or five times for seven, or split his 35 votes up in any way 
that he pleases. The 35 who receive the highest number of 
votes in this way from the voters of their party are nomi¬ 
nated. 

By this method the candidates who represent the mar¬ 
ginal intelligence, because they are the most numerous can¬ 
didates, will be found to have received proportionately the 
least number of votes. This type of candidate is to be found 
in abundance in all parts of the city and they have hitherto, 
with rare exceptions, furnished all our nominees. But the 
candidates of the specialized groups will be less numerous; 
they will receive the whole of the group vote, and they will 
constitute more than half of the nominees of each of the 
parties which have hitherto wielded the power of govern¬ 
ment. In this way, also, we will be able to ‘‘lose^’ at 
the start that burdensome load of ambitious mediocrities in 
whose political successes Public Policy has no interest. We 
will also at the same time “lose” the disproportionate rep¬ 
resentation of special classes in the governing body. 

4. Any group presenting a petition containing one thirty- 


30 


PUBLIC POLICY 


fifth of the voters at the last preceding election as signers 
thereto may form a party which must nominate a full ticket 
which, if it casts a required number of votes, may be a 
party able to participate in the primaries thereafter. But 
the effect of the system will be to discourage the formation 
of new parties because the more the number of parties is 
increased the greater is the loss through unfilled quotas. 
At the same time party tickets may be made up by petition 
after the primaries by those who participated both as 
candidates and as voters at the primaries. 

Thus there will be the utmost freedom given to the group 
consciousness to express itself. But the system will dis¬ 
courage in every way the formation of the vicious and 
irresponsible little parties by shelving a great part of their 
votes in the unfilled quotas at the election proper, and 
also by absorbing all their elements of strength by factional 
representation within the great parties through the party 
QUOTAS. The group consciousness, being thus free to 
express itself, will exclude from all control the representa¬ 
tives of the marginal intelligence; the caudal appendage of 
GOVERNMENT will diminish in importance as the latter 
becomes more erect and intelligent until it becomes a useful 
but invisible coccyx/* 

II. Proportional Bepresentation at the Election. 

1. We will suppose that at the ensuing election the voters 
are equally distributed among the polling places in the 
parties to which they severally belong, so that they are not 
“bunched^’ anywhere, and that the year is one of the great¬ 
est possible disaster to the Republicans. The vote of all 
parties will be assumed to be as follows: 


Democrats. 183,528 

Republicans. 71,495 

Progressives. 65,784 

Socialists . 19,407 

Prohibitionists . 9,786 


Total. 350,000 









HEEOIC ORGANIZATION OF GOVERNMENT 


31 


Under these circumstances the Democrats would elect 
their whole ticket and 166,472 votes would have been cast 
in vain for the candidates of the Republican, Progressive, 
Socialist and Prohibition parties. It would have cost the 
Democrats just 5,243 votes each to elect their thirty-five 
aldermen and the chariot of the imbecile “Lord of the 
World,the marginal Juggernaut, would have rolled tri¬ 
umphantly over the prostrate hosts of the Republicans, 
Progressives, Socialists and Prohibitionists. An aldermanic 
“ring’’ would immediately be formed among the victorio-us 
candidates, two-thirds of whom would represent 122,352 
votes, and this minority, if the votes were equally distrib¬ 
uted locally among the parties, would rule. 

III. The Gerrymander/^ 

If the voters were bunched in certain wards, as they 
always are, it might easily be that by a “Gerrymander,” 
and in a year when their vote was less than half of the 
opposition, the Democrats could have elected 20 or more 
of their candidates. This has been done time and time 
again since the days when the former Vice-President of the 
United States invented it where the showing after election 
has been something like the following: 



Dem. 

Opposition 

Dem. 

Wards 

Vote 

Vote 

Elect. 

1... 

. 3,000 

2,000 

1 

2. 

. 1,000 

11,200 

0 

3. 

. 3,000 

1,800 

1 

4. 

. 1,000 

6,000 

0 

5. 

. 1,000 

7,000 

0 

6. 

. 3,000 

2,000 

1 

7. 

. 1,000 

8,000 

0 

8. 

. 9,000 

7,000 

1 

9. 

. 1,000 

10,000 

0 

10. 

. 3,000 

2,000 

1 

11. 

. 1,000 

20,000 

0 

12. 

. 3,000 

2,000 

1 

13. 

. 3,500 

3,000 

1 















32 PUBLIC POLICY 




Dem. 

Opposition 

Dem. 

Wards 


Vote 

Vote 

Elect. 

14. 


.... 1,000 

12,000 

0 

15. 


.... 3,500 

3,000 

1 

16. 


,... 3,500 

3,000 

1 

17. 


.... 3,500 

3,000 

1 

18. 


.... 1,000 

19,000 

0 

19. 


.... 3,500 

3,000 

1 

20. 


.... 3,500 

3,000 

1 

21. 


..,. 1,500 

16,000 

0 

22. 


.... 3,500 

3,000 

1 

23. 


.... 3,500 

3,000 

1 

24. 


.... 1,500 

14,000 

0 

25. 


.... 3,500 

3,000 

1 

26. 


.... 1,000 

15,000 

0 

27. 


.... 1,000 

10,000 

0 

28 . 


. . . . 3,500 

3,000 

1 

29 . 


. ... 3,500 

3,000 

1 

30. 


.... 3,500 

3,000 

1 

31. 

1 T - I 1 - * 

.. .. 1,000 

18,000 

0 

32 . 


.... 3,500 

3,000 

1 

33 . 


.... 3,500 

3,000 

1 

34 . 


.... 1,500 

15,000 

0 

35 . 


.... 1,500 

20,000 

0 

Total .... 


....100,000 

250,000 

20 


Thus the Democrats, although casting but two-sevenths 
of the total vote could, if they penned the opposition up in a 
first-class ‘ ‘ Gerrymander, ’ ^ elect 20 out of the 35 aldermen, 
and the aldermen would not cost them more than 2,857 votes 
each, while the opposition would have to cast 16,666 votes 
for each of their candidates elected, and it would he abso¬ 
lutely impossible for the opposition^ no matter how united 
their forces were, to prevent the Democrats from getting 
a majority of the aldermen. 

2. But, under Proportional Representation, in the year 
of the Democratic “Landslide,” when, as given (II) in the 
first column of figures above, the Democrats cast 183,528 



























HEROIC ORGANIZATION OF GOVERNMENT 


33 


votes and could, if each party's quota of voters was evenly 
distributed throughout the wards, have elected all their 
candidates, the result would have been determined in the 
following manner; 

At the election the ballot will contain the names of the 
nominees of each of the parties arranged as they are on our 
Australian ballot. The large circle will appear in front of 
the party designation and the little square in front of the 
names of the candidates. The voter is required to vote one 
of the party tickets “straight;" he makes a cross in the 
large circle and is permitted to mark with his cross one of 
the little squares, thereby designating a “preference." This 
is called the “List System," and is the best of the schemes 
of Proportional Representation devised. If the voter fails 
to mark a preference, or marks more than one, or marks 
more than one large circle, the ballot will be rejected. 

The voters having cast their ballots, it is found that the 
total vote is 350,000, which, divided by 35, the number to be 
elected, gives 10,000 as the quota, the number of votes to 
be cast by a party to elect an alderman. Dividing the 
total party votes by the quota, we get the following 
results: 

Democrats .18 quotas filled, plus Fractional Q. 3,528 

Republicans. 7 quotas filled, plus Fractional Q. 1,495 

Progressives. 6 quotas filled, plus Fractional Q. 5,784 

Socialists . 1 quota filled, plus Fractional Q. 9,407 

Prohibitionists ... 0 quota filled, plus Fractional Q. 9,786 

This gives 32 full quotas, and there are 35 in the full 
electorate. Hence we take the three highest unfilled quotas 
and give to the parties casting them each one more aider- 
man. Then there would have been elected: 


Democrats. 18 

Republicans. 7 

Progressives. 7 

Socialists. 2 

Prohibitionists . 1 

Total .35 












34 


PUBLIC POLICY 


Here then, in what would now be a ‘‘Landslide,’^ the 
Democrats would only have a majority of one. The 320,- 
000 votes constituting the 32 Full Quotas of the Demo¬ 
crats, Republicans, Progressives and Socialists would have 
elected 32 aldermen ,—not one of these votes being thrown 
away. Of the 30,000 distributed among the Unfilled Quotas 
of the parties, the 24,977 of the Progressives, Socialists and 
Prohibitionists would have elected 3 aldermen, leaving but 
5,023 votes which did not elect, or help to elect, an addi¬ 
tional alderman for their party. But they still would not 
be entirely thrown away, but would count in determining 
which of the candidates of their parties received the most 
preferences. 

3. For after the party votes have been counted and the 
number of aldermen to be allotted to each party determined, 
the next step is to determine which of the candidates of the 
several parties are elected. This is determined by adding 
up the preferences, and the candidates who receive the high¬ 
est number of preferences are chosen to fill their party’s 
quotas. In this selection the votes of the fractional quotas 
count as much as the others. 

4. This system put in operation results in a thorough and 
scientific interrogation of the group-consciousness. As each 
of the parties will lose a large number of their candidates 
the result will be to trade off the inferior or “marginal” 
types for the better ones, and no Democrat will have to bolt 
his ticket to express his convictions; there will always be 
at least one candidate satisfactory to him on the list of his 
party; if not, it will be time for him to join another party. 

5. Not only for the City is this the best plan of operation, 
but it will work just as well for the State and the Nation. 
The system will first be tried by cities and municipalities 
and then by states, and out of the results attained by the 
institution of this system by the states will come that event¬ 
ful modificaion of the ancient machinery of the Constitu¬ 
tion which will make the useful invention of the Revolu¬ 
tionary heroes look like a sickle alongside of a self-binder, or 
the clumsy cart of the Merovingian kings alongside of an 
automobile. 


HEEOIC ORGANIZATION OF GOVERNMENT 


35 


6. The persons selected as the representatives of the 
Group-Interests will eventually be the only officers elected 
at general elections. The days of the “Blanket Ballot’’ will 
have passed forever. The officers elected will be “princes,” 
leaders of the constituent elements of the active working 
force of the population as they are concerned about the 
Useful Work of Civilization. They will wield through 
GOVERNMENT the rightful authority of functional control 
which is the only security of Liberty and of Power. They 
will appoint all the other officers of government, from the 
judges of the courts down, and have the power to both ap¬ 
point and remove all governmental employees at will. By 
this means we will “put all our eggs in one basket,” and 
we will have the means of watching over that basket ef¬ 
fectually. 


IV. The Aldermanic Election in Chicago of April 6, 1915. 


At this election the votes were cast as follows; 


rards 

Dem. 

Rep. 

Soc. 

Prog. 

Pro. 

Ind. 

1 .... 

... 8,594 

3,910 

574 

73 

0 

0 

2 .... 

... 6,893 

10,599 

433 

3,697 

0 

0 

3 .... 

... 9,457 

12,844 

394 

0 

0 

0 


7,363 

14,193 

458 

0 

0 

0 

4 .... 

... 7,596 

4,111 

218 

0 

0 

0 

5 .... 

... 8,154 

6,151 

268 

0 

0 

0 

6 .... 

... 6,012 

18,503 

477 

0 

0 

0 

7 .... 

... 9,399 

18,135 

526 

0 

0 

0 

8 .... 

... 6,197 

9,576 

556 

0 

0 

0 

9 .... 

... 4,945 

10,832 

1,267 

0 

0 

0 

10 .... 

... 4,929 

3,016 

597 

193 

0 

0 

11 .... 

... 6,602 

3,693 

348 

0 

0 

0 

12 .... 

... 8,549 

5,193 

798 

0 

0 

0 

13 .... 

... 12,394 

12,943 

560 

0 

0 

0 

14 _ 

... 6,963 

10,574 

554 

0 

0 

0 

15 .... 

... 6,577 

7,751 

3,405 

62 

0 

0 


5,691 

6,147 

6,265 

0 

0 

0 

16 .... 

... 6,961 

2,635 

258 

0 

0 

0 

17 .... 

... 3,339 

3,593 

169 

0 

0 

0 



















36 


PUBLIC POLICY 




/ 

Wards 

Dem. 

Rep. 

Soc. 

Prog. 

Pro. 

Ind. 

18 . 

.. 9,120 

9,432 

752 

71 

0 

0 

19 . 

.. 5,330 

2,722 

308 

0 

0 

0 

20 . 

.. 3,215 

3,282 

0 

24 

0 

0 

21 . 

.. 9,797 

6,814 

551 

0 

0 

0 

22 . 

.. 4,575 

4,412 

1,184 

0 

45 

0 

23 . 

.. 6,400 

14,311 

816 

121 

0 

0 

24 . 

.. 6,263 

8,327 

792 

0 

0 

0 

25 . 

.. 7,049 

23,806 

788 

0 

0 

0 


7,085 

22,538 

700 

932 

0 

0 

26 . 

.. 8,151 

16,463 

906 

0 

163 

0 

27 . 

.. 5,587 

8,470 

12,853 

0 

0 

0 

28 . 

.. 5,556 

11,270 

1,025 

0 

0 

0 

29 . 

.. 7,446 

9,351 

1,001 

0 

0 

0 

30 . 

.. 8,303 

5,955 

269 

0 

0 

0 

31 . 

.. 7,792 

14,508 

803 

0 

0 

0 

32 . 

.. 8,633 

23,028 

751 

48 

0 

9,573 

33 . 

.. 5,841 

11,063 

1,396 

0 

0 

0 

34 . 

.. 9,869 

12,055 

1,242 

0 

140 

0 

35 . 

.. 13,308 

13,389 

1,266 

0 

0 

0 

Total . 

..269,531 

385,598 

45,528 

5,221 

348 

9,573 


Dem. 11 Rep. 25 Soc. 2 Prog.O Pro.O Ind. 0 


Including the Independent vote or 9,573, the total vote 
of all parties was 715,799. At this election there were 38 
aldermen to be elected; three to fill vacancies. Dividing the 
total vote of 715,799 by 38 we get 18,836.81 as the quota. 
Dividing the party votes by this quota we find that the 
parties cast the following full and fractional quotas; 


Democrats. 14 plus 5,815 fractional quota 

Republicans. 20 plus 8,861 fractional quota 

Socialists. 2 plus 7,854 fractional quota 

Progressives . 0 plus 5,221 fractional quota 

Prohibitionists . 0 plus 348 fractional quota 

Independent. 0 plus 9,573 fractional quota 

Total. 36 plus two quotas in fractions 
































HEEOIC ORGANIZATION OF GOVERNMENT 


37 


This would have elected: 


Democrats. 14 

Republicans. 21 

Socialists. 2 

Progressives. 0 

Prohibitionists. 0 

Independent. 1 


If we throw out the Independent vote of 9,573, the total 
vote is 706,226, which gives for the 38 candidates a quota 
of 18,584.89. This would give the following filled and frac¬ 
tional quotas: 


Full Fractional Quotas 

Democrats . 14 plus 9,342, giving 15 elected 

Republicans. 20 plus 13,900, giving 21 elected 

Socialists . 2 plus 8,358, giving 2 elected 

Progressives. 0 plus 5,221, giving 0 elected 

Prohibition . 0 plus 348, giving 0 elected 


That is, there would have been 36 full quotas filled by the 
parties, and two unfilled, the votes of which are scattered 
in such a way that the 23,242 cast by the Democrats and 
Republicans elects one each, and the 13,927 cast by the 
Socialists, Progressives and Prohibitionists does not elect 
anybody, but the Socialist fraction would have had a voice 
in the preferential vote of their candidates in determining 
which of their 38 candidates (for they would then have had 
38) would have been elected. If it were desired, parties 
having certain important beliefs and purposes in common, 
like the Republicans and Progressives, or the Democrats 
and Socialists, could direct at their party conventions that 
their unfilled fractional quotas, too small to elect, could be 
added to the fraction of the party to which they were allied 
or most closely related when the unfilled fractional quota 
of that party was too small to elect. This would not greatly 
change the result. 

8. Some Practical Lessons And Observations Concern¬ 
ing Proportional And District Representation. —Elbridge 
Gerry was a politician of early days (1744-1814) from 













38 


PUBLIC POLICY 


Massachusetts who died while Vice-President of the United 
States. In his term as Governor of Massachusetts (1810- 
1812) the state was redistricted in such a way by his party 
and by his supposed connivance as to give a majority of 
the Congressmen and State representatives in the electoral 
districts to his party, then a minority, no matter how the 
vote would be cast. In order to accomplish this the electoral 
district had to be stretched out of all pretense to symmetry 
of figure so that from the fancied resemblance to the form 
of a “salamander” seen in the arrangement of the districts, 
the political trick was called a ‘ ‘ Gerrymander. ’ ’ The ‘ ‘ Ger¬ 
rymander” is operating in every State of the Union in some 
form or other and by it the rule of the least intelligent 
element necessary to make a majority is fastened upon the 
voters in the districts in its most obnoxious form. The 
General Assembly of Illinois now (1916) consists of 51 
senators and 153 representatives elected from 51 senatorial 
districts in which the total vote cast in 1914 for United 
States Senator was 1,015,808, distributed according to the 
Daily News Almanac as follows: 


Democrat.. 

.. 373,403 

Progressive . 

. 203,027 

Kepublican . 

. . 390,661 

Socialist. 

. 39,889 

Prohibition . 

. 6,750 

Social Labor. 

. 2,078 


Dividing this total by 153, the number of representatives 
to be elected, we get the figure 6652.341 as the quota, or 
the number of votes entitling a party to a representative 
in the lower house of the General Assembly. Dividing the 
senatorial vote by this, for the purpose of approximating 
the party representation, the respective parties would have 
been entitled to the following representation: 








HEKOIC ORGANIZATION OF GOVERNMENT 


39 


Democrats. 57 

Progressives. 30 

Republicans . 59 

Socialists. 6 

Prohibitionists. 1 

Social Laborites . 0 


As a matter of fact the representation in the lower house 
elected at this election from the districts was as follows: 


Democrats . 71 

Progressives. 2 

Republicans . 78 

Socialists. 2 

Prohibitionists . 0 

Social Laborites.. 0 


The Democrats and the Republicans both had a larger rep¬ 
resentation than they were entitled to. Most, that is, 28, 
of their 33 total extra representatives were stolen from the 
Progressives, but the Socialists yielded up 4 and the Pro¬ 
hibitionists gave them one. When these districts were laid 
out the Progressive Party was not in existence, and hence 
they were not laid out for the purpose of stealing these 
votes which came all from the Republican Party. But the 
illustration shows how the district system strangles the free 
expression of popular opinion and actually caused 186,- 
256 (28 times 6,652) Progressives to cast their votes in vain. 
If we were to take the Illinois Presidential vote of 1912 as 
the means of determining how many congressmen should 
have been elected we have party votes as follows: 


Republican . 253,593 

Progressive . 386,478 

Democrat . 405,048 

Prohibition . 15,710 

Socialist . 81,278 

Social Labor. 4,066 


Total 


1,146,173 






















40 


PUBLIC POLICY 


Dividing the total vote by 27, the number of congressmen 
to be elected, we get 42,450 as the quota. This would 
apportion to the several parties the following: 


Republican Congressmen. 6 

Progressive Congressmen. 9 

Democratic . 10 

Prohibition. 0 

Socialist . 2 

Social Labor . 0 

“What we actually got was: 


Republican Congressman elected 1912.. 5, or 1 for each 50,718 rotes 
Progressive Congressmen elected 1912.. 2, or 1 for each 193,214 rotes 
Democratic Congressmen elected 1912. .20, or 1 for each 20,252 rotes 
Prohibition Congressmen elected 1912.. 0, or 0 for 15,710 rotes 

Socialist Congressmen elected 1912.. 0, or 0 for 81,278 votes 

Soc. Labor Congressmen elected 1912.. 0, or Ofor 4,066 votes 

Then the Democrats stole one congressman from the Repub¬ 
licans, seven from the Progressives and two from the Social¬ 
ists, so that ten congressmen altogether were stolen and 
424,500 (42,450 times 10) voters cast their votes in vain. 
In that year, disastrous to the Republican family, whether 
Progressive or Republican, there nevertheless were cast 
enough votes in favor of the Protective Tariff out of and by 
the two Republican factions to have elected 15 congressmen 
out of the 27 if the voting system had been proportional 
and the issue between Taft and Roosevelt could have been 
fought out without serious loss to the standing of the party 
in Congress. This is shown by the popular vote for presi¬ 
dential electors cast in 1912 as follows: 


Republicans. 3,481,632 

Progressives. 4,120,101 

Democrats. 6,292,499 

Socialists . 898,481 

Prohibitionists. 205,440 

Social Labor . 25,431 


Total 


15,023,584 
















HEROIC ORGANIZATION OF GOVERNMENT* 41 

Dividing this total by the number of presidential electors 
to be elected, or 531, we get the electoral or presidential 
QUOTA of 28,293, or the number of votes necessary for a 
party to elect a presidential elector. Again dividing the 
same total by 435, the number of members of the House of 
Representatives, or ‘‘Congressmen’’ to be elected, we get 
34,536.95 as the Congressional quota. Dividing the re¬ 
spective votes of the parties by the two quotas we get the 
following results, which would have elected a Republican- 
Progressive or a Progressive-Republican: 

Presidential Electors 

Republicans . 123 + 1,593 . 123 

Progressives. 145 + 18,516 equals third highest fraction, or 140 

Democrats. 222 -f 11,453 . 222 

Socialists. 31 4- 21,398 equals next highest fraction, or 32 

Prohibitionists ... 7 + 9,389 . 7 

Social Labor. 0 + 25,431 equals highest fraction, or_ 1 

Total full. 528 plus three fractional quotas, or 531 

As a matter of fact there were chosen the following 


electors: 

Wilson, Democrat. 435 at a cost of 14,467 votes each 

Roosevelt, Prog. 88 at a cost of 46,807 votes each 

Taft, Rep. 8 at a cost of 435,404 votes each 

Debs, Soc. 0 at a loss of 898,481 votes cast in vain 

Chafin, Pro. 0 at a loss of 205,440 votes cast in vain 

Reimer, Soc. Lab. 0 at a loss of 25,431 votes cast in vain 


If the Proportional System had been in operation the 
Republican factions would have elected a majority of the 
presidential electors, or 269. Under the Federal Constitu¬ 
tion, Proportional Representation would have to be com¬ 
puted from the votes of states, and not by that of the entire 
United States. I have not, however, taken the time to com¬ 
pute what the result in this manner would have been. 

















42 


PUBLIC POLICY 


Dividing the party votes by the congressional quota, 
we find that the Proportional System would have appor¬ 
tioned the federal representatives as follows: 


Eepublicans. 100 Full Quotas plus 27,937 electing 101 

Progressives . 119 Full Quotas plus 11,183 electing 119 

Democrats. 182 Full Quotas plus 16,760 electing 182 

Socialists. 26 Full Quotas plus 520 electing 26 

Prohibitionists . 5 Full Quotas plus 32,755 electing 6 

Social Labor. 0 Full Quotas plus 25,431 electing 1 

Total Full. 432 plus three fractions electing 435 


There were, in fact, elected at the election of 1912 435 con¬ 
gressmen distributed as follows: 


Eepublicans. 127, costing them 27,414t^ votes apiece 

jTrogressives . 7, costing them 588,585 votes apiece 

Democrats . 290, costing them 21,698 votes apiece 

Socialists. 1, costing them 898,481 votes 

Prohibitionists . 10, costing them 20,544 votes apiece 

Social Labor. 0, and they cast 25,431 votes in vain 


The “cost’’ of the congressmen to the parties is estimated 
in the terms of the presidential vote for the electors. Under 
the Proportional System the congressmen would have to be 
elected from the several states at large and not by the total 
vote of the United States,—at least it would require an 
amendment to the federal constitution to abolish the state 
lines. For Congress could now provide by statute that the 
members of the House of Representatives should be elected 
at large from the states upon the Proportional System and 
that hereafter congressional districts should be abolished. 

9. Under Proportional Representation The Politician 
Would Have A Secure And Stable Professional Standing 
And Revolutions Would Be Impossible. —By “revolu¬ 
tions” I do not mean “Mexican Revolutions/’ but the 















HEEOIC OEGANIZATION OF GOVEENMENT 


43 


political revolutions which occur with us when, by a margin 
of a few thousand votes, a clean sweep is made of all the 
offices,—an abuse that has fastened upon us, as the only 
other alternative, the absurdity of “Civil Service/' The 
men who work for the establishment of Public Policy should 
and must enforce it: “To the victors belong the spoils” 
not only because the laborer is worthy of his hire, but more 
particularly because for each of the groups important 
enough to be represented in the Board of Control of the 
City, State or Nation, it is necessary that there should be 
an efficient and well-oiled machine looking out for the inter¬ 
ests of the group as they are related to the other groups, 
and who will see to it that the titular leader of the group 
representing them in the Board of Control attends to his 
business. The public patronage would be divided among 
the members of the Board of Control, and the circumstances 
that would vary the representation of a party in this board 
would not greatly disturb the apportionment of the patron¬ 
age. Every large group is made up of many smaller ones, 
and the holders of the minor offices should be their repre¬ 
sentatives who may in time be promoted. Political activity 
is a professional activity, and those who are assigned to 
this work should have the opportunity to live by their work 
with the same assurance of stability as persons following 
any other form of Useful Work. 

10. Proportional Representation Will Give To All A 
Definite And Rational Interest In Public Policy And Is 
The First Great And Necessary Social Improvement With¬ 
out Which No Important Advance In Public Policy Is 
Possible. —At the present time all that special knowledge 
and special zeal which is not common to all, that knowledge 
and purpose which is the result of a special training and 
experience, is disfranchised. What does it profit me to 


44 


PUBLIC POLICY 


vote if I must vote constantly for a type of men who are 
ignorant of and contemptuous towards the things that I 
value the most? If I am a “Democrat/^ to what extent are 
my ideas advanced by the election of titular “Democrats’^ 
to office ? If I am a ‘ ‘ Republican ’ ’ what does it profit me 
if my party gains the whole ticket and I fail to elect a man 
of the type for the purpose of which I voted that party 
ticket? Accident will sometimes place a man of the con¬ 
victions and purposes characteristic of the masters of in¬ 
dustry and of the controlling functions of Useful Work, but 
accident will not keep him there; only the Consensus of the 
marginal voters can do that. In order to maintain that 
Consensus at a temperature which will permit the continu¬ 
ance in Public Life of the most useful men extraordinary 
efforts inconsistent with the principles of constitutional 
government must be made. Some popular caprice may 
defeat an able and representative man just when his party 
most needs him, as McKinley was defeated in 1890 at the 
congressional election in his district. Great leaders of 
parties should never be in doubt of their election so long 
as they retain the leadership of their parties, and they 
should be able to devote the whole of their time to the public 
service. What is called a “landslide” today would, under 
the Proportional System, be merely enough to cause the loss 
of a few congressmen, a loss of a control in the House, but 
under it the nucleus of the party would remain unimpaired 
and it would suffer but a slight loss of both prestige and 
patronage. The pressure for office would be reduced to a 
minimum by constantly keeping in the public offices that 
proportion of officeholders to which each party was entitled. 
This would accomplish all that Civil Service was proposed 
to do, and by this plan the government would not have 
its hands tied with useless red tape. Both for those who 


HEROIC ORGANIZATION OF GOVERNMENT 


45 


hoped to 'earn a living by legitimate service in public life 
or in politics, as well as for those who hope to advance the 
causes which are approved by them, Proportional Repre¬ 
sentation is the supreme issue. 

But more than this: without Proportional Representation 
we can never escape from the ball-and-chain of the marginal 
control, and the problems which the modem state must 
accomplish cannot be undertaken. Many excellent reforms 
have been worked out on paper,—such as the governmental 
operation of certain public utilities—which must be post¬ 
poned to another generation until a responsible and efficient 
governmental machine exists. The governmental machine 
must be strong, resilient, elastic and able to meet all sudden 
shocks and emergencies; its officials must be able to deal on 
terms of equality and power with the heads of the great 
corporations whose tenure of office will be no more secure 
than their own, and they must be able to have acquired a 
thorough understanding of the various conditions under 
which all Useful Work is carried on so as to be able to make 
Public Policy accord with Business Policy. The men who 
will finally come into control of the offices of government 
will have had a long preparatory training as the repre¬ 
sentatives of class-conscious groups functioning in the 
Useful Work of daily life. They will not represent out¬ 
worn fictions, and they will never cater to the whims and 
caprices of the marginal voters. The latter may have their 
representatives, but they will not control as they do now. 
If there are ten thousand hoboes in the city when the vote 
of 350,000 before mentioned is cast, they will be entitled to 
but one alderman, and they will get him, and no more. The 
hoboes are mostly concentrated in certain wards; they are 
the best represented of all the people in the city because 
their representatives represent a distinctly class-conscious 


46 


PUBLIC POLICY 


group and they know what their people want. This the 
other aldermen do not know, and therefore the wards are 
constantly changing them, as the voters of the districts, 
who are not a solidarity or group-consciousness, are con¬ 
stantly seeking rest and finding none. 

The political parties as we now know them would dis¬ 
appear with Proportional Representation, they would ‘ ‘ suf¬ 
fer a sea-change into something rich and strange.’’ The 
factions which are linked together in either of the great 
parties are at present merely accidentally tending in a 
given direction, not because they all want the same identical 
thing. Under the proposed system it would be possible for 
me to vote always for the exact policy I want without 
bolting my party, and thereby the factions in the parties 
would be able to bend them to their wills without breaking 
up the party organization, and would drive forward the 
marginal intelligence. The greater the strife of factions, 
the greater would be the vitality of the party, for factional 
strife could not “knife” the party by pushing its factional 
party program. But, under present conditions, party fac¬ 
tional strife does not make for party success, and Ben 
Butler’s famous saying is not true. This the Democrats 
of 1896 and the Republicans of 1912 can verify. 

11. Proportional Representation Will Select As The 
Organs Of Public Policy And As The Representatives of 
Government The Most Capable Political Agents Of The 
Class-Conscious Groups Which Carry On The Useful Work 
Of Civilization And Thereby Establish The Heroic Organ¬ 
ization of Government. 

(a) The Class-Conscions Groups are the natural pro¬ 
liferations of the population resulting from the Useful 
Work of SERVICE, INDUSTRY and government. As a child 
first learns to distinguish a living from an inanimate object, 


HEROIC ORGANIZATION OF GOVERNMENT 


47 


so the student of natural law learns to distinguish Natural 
Forms^* from Accidental Forms. A natural form is a 
living being, plant, animal or cystal, which by a force 
intrinsic to its substance has developed by growth a visible 
body in which the external shape and internal structure 
are harmonious expressions of the internal force which 
operates in its purposive consciousness, that force by which 
it is what it is, the Forma Suhstantialis, Entelecheia, or 
Soul of the Form, An accidental form is one in which 
there is no such force making for symmetry or solidarity; 
it has not developed its mass or visible body by growth, 
but it is made by forces extrinsic to that of its substance, 
so that, so far as the forces within it are concerned, its 
form and structure are accidental. Thus a handful of 
mud, a shapeless mass of flesh or rock torn from its source 
is an accidental form and has no life in it determining 
it to that form and structure. Form and structure are the 
symmetrical expressions of Life; every living thing takes 
on an external form and an internal structure which is 
exactly harmonious with the life in it, and without the 
perfect adjustment of these harmonies of form and struc¬ 
ture the living thing will die. A carved figure of a man 
resembles a living man slightly in form, but in nothing else. 

Just as the inherent force of an ultimate particle of sub¬ 
stance operates in the body of an animal or plant to 
produce the form of symmetry by which it expresses itself 
and multiplies its powers, employing for a time a countless 
multitude of similar ultimate particles of matter upon 
which it impresses its will and purpose,—so the law of 
association in Useful Work produces similar proliferations 
of the group-units. The groups are made up of individuals 
associating in some necessary work and by the laws and 
forces of symmetry arising from the nature of their work 


48 


PUBLIC POLICY 


the principles of their association are determined. The 
reality which results is a living social body having a pur¬ 
posive or group-life of its own, and the whole of these 
bodies or groups constitute the body of that monster which 
Hobbes called ‘‘Leviathan’^ or Civilization whose soul is 
SERVICE. In every living body the individual caprice of 
the units of structure are subordinated to the purpose 
which animates the body or organ. If that were not the 
case the body would not be alive. In the accidental form 
the opposite is the case, and the caprice or individuality of 
the realities which make up the structure are exercised 
without any reference to any common purpose. Hence 
the chain is no stronger than its weakest link, and the crowd 
moves no faster than the pace of the slowest, and the con¬ 
sensus of an accidental group will be that of those least 
disposed to agree to anything. As the class-conscious 
groups arising from Useful Work are, in fact, those who 
do the Useful Work of the world, their common purposes 
will always be that of the highest integrating group so 
far as the capacity of the dependent groups are able to 
carry it out. The purpose of Civilization as a whole, if 
organized in this manner, would be that of the group of 
the greatest functional importance in defining and exempli¬ 
fying the formulas of service. For each essential group 
the chief concern would be its functional relation to the 
groups with which it was related, and the maintenance of 
that relation would he its business policy. Every effort 
of each of the group-units would tend to emphasize this 
and to demand and enforce the selection of representatives 
of the group who could carry out this policy. Every one 
of these units would be keenly alive to the practical neces¬ 
sity of this policy and sensitive to any hostile change in the 
environment of the group. The representatives of the 


HEROIC ORGANIZATION OF GOVERNMENT 


49 


groups would be the social nerves of the body of this 
“Leviathan/^ and their consensus would necessarily be 
that of the interests of the groups of those engaged in 
Useful Work in their functional relations to each other, 
or Public Policy in the proper sense. 

(b) The steady pressure of the selfish interests of the 
groups vnll produce perfect coordination and dispense with 
the necessity of the negative checks restraining the Moh 
which now constitute the principal business of government. 
A Mob is an accidental aggregate of human units tom 
loose from the purposive tendencies, of Useful Work and 
acting under the unrestrained promptings of the least intel¬ 
ligent element necessary to make a majority, or a consensus 
arising from the accidental assembly of the units composing 
it. Except for the necessity of Useful Work every political 
aggregate known to our law would really be a mob, for our 
political wisdom is able to create nothing else but mobs, 
unless we organize armies for military purposes. Useful 
Work, however, exerts its restraining influence upon these 
mobs called political organizations, and this restraint all 
the policies of government and of Public Policy seek to 
maintain. For this purpose we have invented a multitude 
of negative checks and baffling entanglements. But by 
selecting at large the representatives of Public Policy from 
the natural groups of those functioning in the Useful Work 
of society, we will find that the selfish interests of the groups 
will dominate the action qf the group-units and that the 
representatives of the groups thus selected will necessarily 
coordinate perfectly the various selfish interests of the 
groups,—and by so doing coordinate in the real and endur¬ 
ing interests of Civilization. 

(c) The Heroic Organization of government. In a 
certain sense every man who is as big as his job is a hero, 


50 


PUBLIC POLICY 


for then no one could do it any better. All that is neces¬ 
sary to secure the heroic organization of government is 
to free the functioning groups from the restraints which 
interfere with the better performance of their work and 
which misplace the group-units. As Tyndal said: 
is simply matter out of place.^* Conversely, as applied 
to the problem under consideration, the heroic organization 
of society will be accomplished when we have permitted 
Useful Work, which always makes for symmetry of form 
and structure, to assign everywhere the right man to the 
right place. Then all the strength, talent, ability and 
usefulness of the group-units will be wisely and econom¬ 
ically directed, and society will put on its “giant strength.’’ 
When every energy employed in Useful Work is free to 
expend itself in its own way, variations in individual 
capacity will be multiplied by the variations of functional 
capacity, and the condition of liberty will be the condition 
of the utmost security and power. 

12. Proportional Representation and Woman-Suffrage. 
In many states the electorate has been doubled by Woman- 
Suffrage. This necessarily still further reduces the level 
of the intelligence that is common to all. For, if women 
can bring to the electorate special capacities, instincts and 
knowledge which are peculiar to themselves, the effect 
will be similar to any other increase in the number of elec¬ 
tors differing among themselves in peculiar special knowl¬ 
edge and training. But the moral and intellectual differ¬ 
ences in the sexes will emphasize themselves. Just as men 
excel in initiative and are deficient in stability, women are 
deficient in initiative and excel in stability. Their influ¬ 
ence, as soon as they arrive at any sort of a class-con¬ 
sciousness, will be to inhibit changes and innovations, and 
to stabilize the conventional usages to which they are ac- 


HEROIC ORGANIZATION OP GOVERNMENT 


51 


ciistomed. The souls of these delicate, fragile things are 
ten times more rigid than tungsten-steel. That is as it 
should be, for they are the treasure-holders, and keep the 
parlor of Civilization. If before the adoption of Woman- 
Suffrage radical reforms were made difficult by the 
Machiavellian-Ricardian economics, afterwards no changes 
of any kind would be possible which were inconsistent 
with the policy of the leaders of the class-conscious groups. 
The ordinary political declamation which plays havoc with 
the marginal male element will never work with women; 
the instinct of stability, which all male creatures lack, 
guides them where experience and knowledge fails. This 
same instinct will cause them to be influenced by the 
established industrial and social forces, rather than by the 
unstable and changeable leaders of the political districts. 
Other than by the leaders of the class-conscious groups 
the new electorate can never be organized, for the or¬ 
dinary style of political organization and agitation can 
never appeal to women. A subtle instinct, in which resides 
the wisdom of the race, makes the Ward-Club and all its 
associations abhorrent to the delicacy of womeli. 

13. Suffrage and the Alien Vote. The European Civ¬ 
ilization, of which the United States is the perfect fruit, 
has been produced by one race of men under varied 
conditions. No European white man is a ^‘foreigner’’ 
to us. This race is by nature endowed with certain 
habits and instincts which separate it from all other 
races of men, and so makes it a species. Out of 
these instincts and peculiarities it has spun this body 
of laws and institutions whose future development could 
not be entrusted to alien branches of the white race, 
and certainly should not be committed to the care of wholly 
non-white races like the negroes and the Chinese. But 


52 


PUBLIC POLICY 


when the right of suffrage is limited to the members of this 
race, naturalized in the United States, they constitute an 
electorate which, having produced all the civilization that 
there is in the world, is instinctively capable of meeting all 
future problems. But this electorate must be guided by the 
intelligence of its specially trained groups as a man is by 
his senses and his judgment. We must not place the burden 
of the world on the back of the members of our family who 
possess only that intelligence which is common to all of us. 
Their intelligence is not the intelligence of the People, 
their representatives are not the representatives of our 
People, and the experiment of attempting to maintain by 
them GOVERNMENT of the People, by the People and for 
the People, has failed. We must call upon the heroes of 
the common life, the leaders of the class-conscious groups, 
to represent us, and to frame for us Public Policy. Except 
under their leadership it will be impossible to undertake 
the solutions which I propose to outline in the following 
chapters. 

Proportional Representation is therefore the first and 
most important of all so-called **reforms/^ for without it 
no other reform of any importance is possible. 


f 


CHAPTER II 

THE HOUSE OF BUSINESS POLICY 

1. A Sudden And Universally Great Demand For Di¬ 
rected Laborers Arising From Any Adequate Cause Would 
Be Followed By Industrial Anarchy By Reason Of Strikes, 
Lockouts And Labor Troubles.—Let us suppose that the 
program to be hereafter outlined in Chapter III is being 
carried out; or, that from any adequate cause a tremendous 
increase in the purchasing power of the Market should 
occur, and a corresponding demand sets in for directed 
laborers; then, it is evident that under existing conditions 
industrial anarchy would immediately ensue. Wages 
would rise and keep on soaring as among the miners in the 
early camps of California. Labor wars of the most serious 
character would ensue, so that the benefit of the proposed 
change of policy would be largely, if not wholly, lost. To 
meet this condition, and to dispose forever of the absurdity 
of strikes and lockouts and the criminal employment of 
organizations of directed laborers, it is necessary to restore, 
on the scale and proportion of modem life, a municipal 
corporation coextensive with the State similar to the Medie¬ 
val Trades Guild. This corporation will wield the disci¬ 
plinary power of the State over all employers and em¬ 
ployees and be, in fact, the State of Illinois, not engaged in 
the Useful Work of Government in the general political 
sense, but the State of Illinois engaged in the Useful Work 
of INDUSTRY and therein presiding over that work. 

53 


r 


54 


PUBLIC POLICY 


2. In The Transition From The Medieval To The 
Modern Life, Civilization Lost An Important And Neces¬ 
sary Organ Of Public Policy,—viz.: The Medieval Trades 
Guild. —A Trades Guild was not in any way similar to a 
Labor Union. Its chief characteristics were as follows; 

1. A trades guild was a municipal corporation, clothed 
with governing authority, and could enact ordinances and 
have them enforced. It was similar to a park board or a 
village in this respect. 

2. Over each important trade some guild presided and by 
its ordinances regulated the conditions of employment, 
prices and wages. 

3. Only the employing masters could vote in the sessions 
of the guilds and the interests of the directed laborers were 
committed wholly to the care of the employing masters as 
a class. 

4. In the guilds each employer had but one vote, no mat¬ 
ter how large his business was, and thus employers whose 
harsh treatment of employees brought trouble to other 
employees, would be disciplined by their fellow masters. 

5. In like manner employers who paid lower wages and 
made inferior goods which enabled them to unfairly com¬ 
pete with their business rivals would be disciplined by their 
fellow masters, compelled to pay higher wages and make 
better goods or go out of business. 

6. Guilds first began to appear during the tenth century, 
when the daily wage of the unskilled laborer was of the 
present purchasing power of fifty cents per day. When in 
the turmoil arising from the invention of printing at the 
beginning of the sixteenth century the hereditary nobility 
got the chance to steal the public lands and reduce the 
people to slavery, they first nullified and then abolished the 
powers of the guilds. At this time, in 1500, before the gen¬ 
eral introduction of printing, the daily wage of the un¬ 
skilled laborer in England exceeded the present purchasing 
power of $3.00 in our markets and was the highest that it 
had ever been known to be in history. It had slowly risen 
from the wage of the tenth century (then equal to the 


THE HOUSE OF BUSINESS POLICY 


55 


present purchasing power of 50 cents) under the joint pro¬ 
tection of the Religious Orders and the Medieval Guilds. 
Thirty years after the expulsion of the Religious Orders 
and the confiscation of the church lands and the appropri¬ 
ation of the common land and the depreciation of the cur¬ 
rency by Henry VIII (by which the economic system of the 
medieval period was destroyed), the wages of common labor 
had fallen to about 35 cents a day in its purchasing power 
as estimated in present values, and the guilds could not 
enforce their ordinances; they died out as effective forces 
and were finally abolished by act of Parliament. They were 
a constant source of irritation to the slave-driving country 
squires who had participated in the loot of the people, and 
the squires controlled the Parliament until the repeal of the 
‘‘Corn Laws.’’ The publicists who shaped and determined 
all questions of Public Policy in the Medieval Period were 
the Religious Orders, by whom the economic system warred 
on by the hereditary nobility was evolved, and in this the 
Guilds wielded the disciplinary power in the industrial 
trades, determining wages and prices. 

In the modern state there is no power which can exercise 
a legitimate jurisdiction over the problems of industry, 
and the attempt to force this jurisdiction upon the political 
state, or upon government as a special integration of 
Useful Work, by the world-wide Socialistic movement, evi¬ 
dences that civilization has lost something which it is vainly 
seeking to restore. The necessity of this power is also evi¬ 
denced by the growth and development of the Trades 
Unions. 

Trades Unions came into existence as a result of the intro¬ 
duction of modem price-lowering and wage-raising ma¬ 
chinery. About the time that Robert Bums was earning 
fifty cents (in present values) per day working 14 hours 
as a ploughman, the new machinery began to be installed 
in the English factory towns. The slaves of the country 
squires were given refuge and employment there at wages 


56 


PUBLIC POLICY 


having approximately the purchasing power of seventy-five 
cents a day, and to skilled and intelligent men there were 
unlimited opportunities for advancement. The shrewder 
kind of these workmen used to meet at various coffee houses 
at lunch time and canvass the situation, comparing condi¬ 
tions, and out of these associations of the more intelligent 
workmen grew the unions. The union has constantly sought 
to standardize wage by fixing a minimum scale, and thus 
it has served to help to exclude those employers who could 
not meet the fall in price, rise in wage and rise in rent 
tendered by the more efficient employers. But the union 
has had no method of enforcing the minimum wage except 
by labor wars, strikes, lockouts and boycotts which become 
the more destructive and expensive to life and property the 
more extensively the union as an organization operates. In 
their attempts to enforce the standardization of the mini¬ 
mum wage upon the inefficient employers the latter have 
often posed successfully as the champions of the ‘‘right of 
every man to run his own business in his own way,’^ and 
the inability of the unions to enforce their demands in any 
other way than by anti-social methods, culminating fre¬ 
quently in criminal conspiracies, would long ago have re¬ 
sulted in their abolition by law if it were not for the fact 
that, on the whole, they serve a useful purpose and are 
absolutely necessary in the complete absence of any other 
more efficient substitute. In a state of society like that of 
China, where from age to age there is no progress whatever, 
no improvement of method and no Rise in Wage, unions 
can enforce their rules only by resisting the efforts of ineffi¬ 
cient employers to reduce wages. But the Chinese “tongs’’ 
are far from being peaceful organizations, and under a 
more enlightened government would undoubtedly be abol¬ 
ished. The union, as an organization to accomplish its 


THE HOUSE OF BUSINESS POLICY 


57 


principal legitimate purpose, the periodical standardization 
of the advancing minimum wage and the elevation and 
instruction of the directed laborers, is defective in the 
following particulars: 

1. In the Union no employers are permitted; the mem¬ 
bership consists wholly of the directed laborers. But 
LABOR or INDUSTRY is primarily the self-employing act which 
gives direction, and by excluding the employers from their 
membership the directed laborers lose their natural heads 
and champions. 

2. The directed laborer who loses one job must seek 
another employer or employ himself. Hence, in the ordi¬ 
nary run of things, his appeal from one employer is neces¬ 
sarily to another employer. 

3. The overwhelming majority of employees work for 
persons who are nearer to them and who will make, and do 
make, more sacrifices for their interests than any labor 
official possibly could. 

4. The interests of the employer and employee, taken as 
classes, not as individuals, are always and necessarily iden¬ 
tical, not antagonistic. One of the principal evils of the 
trades union is that, by reason of the recurring disputes 
with particular employers, the trades union tends to foster 
the socialistic superstition of “class-antagonism,’’ so that 
the socialist never uses the words “class-consciousness” ex¬ 
cept to mean a consciousness of class antagonism as some¬ 
thing inherent and necesary in the order of things existing 
between employers as “capitalists” and their directed 
laborers. But, on the contrary, every advance in Fixed 
Wage is derived from the advance in Indeterminate Wage 
or Profit, without which no Fixed Wage would exist. And 
Indeterminate Wage is derived from the fall in price 
resulting from superior productiveness which awards every 
RISE IN WAGE and RISE IN RENT. Those inferior employers 
who cannot meet the fall in price of the employers who 
pay the bulk of employees their fixed wages except by cut¬ 
ting the fixed wages of their men are the very ones the em- 


58 


PUBLIC POLICY 


ployers of these men want put out of business, so that the 
employers who alone grant the rise in fixed wages are the 
ones who really standardize the Minimum Fixed Wage, not 
the unions, which merely challenge those inferior employers 
who seek) to reduce wages below the standard thus made, 
or refuse to comply with it. 

5. The union cannot embrace in its membership all di¬ 
rected laborers, but only a few of them. It is a voluntary 
organization, and can never eliminate “scabs.’’ 

6. Finally the union cannot maintain itself except by acts 
of anarchy and disorder, by strikes, lockouts, boycotts, slug¬ 
ging, malicious mischief, arson, dynamite and murder. It 
must actually wage war, like a militant state, and this sort 
of thing is intolerable and must be terminated. 

Objectionable as the Trades Unions are in these impor¬ 
tant particulars, the Employers ’ Associations are as bad or 
worse. A few employers, whose pernicious activities have 
often aroused the indignation of the entire community in 
resisting the just and reasonable demands of their directed 
laborers, organize themselves and assume to be the “heaven- 
bom” champions of the rights of capital. They are usually 
the very ones that real capitalists, if they had their way, 
would first put out of business, and in their struggles to 
resist the competition of employers who pay their men rea¬ 
sonable wages, they involve the whole community in tur¬ 
moil. By reason of these protracted lockouts important 
trades will suspend operations for months, as during the 
building trades strikes; or, by obstinately backing up some 
offensive sweat-shop, may involve the uprising of the whole 
body of organized labor, like the occasion which brought 
about the “Teamsters’ Strike” a few years ago. Again 
the mere lack of a tribunal wherein reasonable grounds of 
difference could be adjusted may bring about dissension 
wholly unnecessary and uncalled for, as in the “Publishers’ 
Lockout” recently, or more recently the strike of the street 


THE HOUSE OF BUSINESS POLICY 


59 


car men when the great city of Chicago was deprived of its 
street car service for a week. Everybody knows these con¬ 
ditions are things that cry for remedy, but we cannot trust 
the machinery of existing government to adjust them. No 
business man would permit a judge and jury of a conven¬ 
tional court to pass upon the details of his business and 
determine for him prices and wages; he would close up his 
business first. Neither can “Arbitration’’ adjust the mat¬ 
ter, for the arbitrators cannot compel or enforce compli¬ 
ance with their awards. Nevertheless a tribunal must be 
established whose decrees business men will accept which 
can adjudicate all labor questions and enforce its judg¬ 
ments and which will permit all the machinery of industry 
to be in uninterrupted operation. This tribunal is the pro¬ 
posed HOUSE OF BUSINESS POLICY, a municipal corporation, 
coextensive with the State, invested by government with 
power to determine these questions, but which is an instru¬ 
ment of INDUSTRIAL and not of political government. It 
is a consolidation into one organization of the offices and 
functions of what, in medieval times, would have been those 
of many guilds. 

3. The Fundamental Principle Upon Which The House 
Of Business Policy Is Founded Is The Fact That Cap¬ 
italists As A Class Cannot Increase Their Profits Except 
By Raising Fixed Wages Of Laborers As A Class.— 

In the struggle to apportion among themselves the whole 
of the tangible goods produced by those who are engaged 
in INDUSTRY the “Differential Factors” (competitors who 
differ each from the other in some functional or individual 
power) who seek to control this apportionment must either 
control it by increasing or diminishing the quantity pro¬ 
duced. If they seek to control the apportionment, and thus 
exclude others from sharing in it, by the exercise of their 


60 


PUBLIC POLICY 


superior productiveness they will establish the Price Lower¬ 
ing Monopoly which is the legitimate Market and whose 
active factors, or “capitalists,’’ as a class cannot increase 
their profits except by lowering the prices of goods to the 
public and by raising the fixed wages of labor and by 
increasing the number and utility of the opportunities com¬ 
mon to all. This effect they accomplish by the fall in 

PRICE, THE RISE IN WAGE and THE RISE IN RENT. By their 

superior productiveness they lower prices and control the 
market and the apportionment of all goods and thereby fix 
all values, constantly excluding those inferior producers 
whose costs of production are such that they cannot meet 
the FALL IN PRICE fixed by them. These inferior producers 
cannot pay the rise in wage ; and, if they could, would cut 
wages and thus for a little while longer they would linger. 
It is to the interest of the more competent employers to 
hasten their extermination as business rivals. In the great 
city are a multitude of persons who have no credit; they 
must eat, however, and pay rent. Hence they must take 
what employment they can find. Taking advantage of this, 
some great mail order houses have sprung into existence 
which are cutting the life out of many a sturdy business 
in the country which pays its employees better wages be¬ 
cause the employees and the employers there have always 
maintained a certain standard of living for their town and 
would not lower it. If these country business men were 
called upon to settle a wage-dispute arising with the em¬ 
ployees of a concern of this kind, they would compel the 
concern to pay its employees decent wages and they would 
make it less able to take an unfair advantage of them by 
paying an unfair wage. Wherever there is a concern that 
sells “shoddy goods,” “sands its sugar,” or cheats its help, 
its profits do not arise from the control exerted by the fall 


THE HOUSE OF BUSINESS POLICY 


61 


IN PRICE, or the control arising from superior productive¬ 
ness and it is a parasite upon all legitimate business,—^the 
common enemy of both labor and capital. All legitimate 
profit is Indeterminate Wage, or the control over the fiow 
of goods in the Market which is maintained by the fall in 
PRICE resulting from methods of superior efficiency. This 
profit is a phenomenon resulting from Increasing Keturns 
and is the reward of Industry to those who increase them. 
That profit which is the result of increasing returns to all 
the several industrial factors continuing to supply the Mar¬ 
ket is necessarily not a form of robbery. It is not only not 
a robbery, but the interest of those who obtain it lies in 
preventing all direct and indirect forms of robbery. It 
does not consist of stolen wages, but every form of increase 
in wage is a gift from those who produce the Indeterminate 
Wage or Profit out of which it is awarded; and, as Fixed 
Wage in its successive increments has been made up of 
similar spontaneous gifts, by which directed laborers have 
been drawn from less profitable forms of self employment 
or employment by those who paid them less, all Fixed Wage 
is wholly the gift derived from this source. The majority 
of the 53,000,000 people living in the cities of the United 
States of more than 2,500 population thus earn their 
living, since they could not work in cities otherwise than 
under direction, and if they were to attempt to maintain 
themselves in the country it would be on Chinese wages. 
That high degree of efficiency in production, which gives the 
major half of the population a better living in the cities 
(where they work under the direction of the most skilled) 
than the agricultural laborers in the country, is solely the 
result of the directing intelligence which pays them higher 
Fixed Wage in the city than the Fixed Wage paid in the 
country. Those who guide and direct are laborers as well 


62 


PUBLIC POLICY 


,as those who work under direction. But the labor that is of 
the greatest functional importance and which contributes 
chiefly to the result, and as the chief producer is entitled to 
the maximum share of the product, is that of the directing 
responsibility, will and intelligence. The directed laborers 
produce their own wage only under direction; the direction 
is not a restraint upon them, but is the mighty hand and 
the stretched-out arm without which they could do nothing 
at all. 

There is another sort of profit which is sought by those 
who are able to exercise some control over the flow of wealth 
in the Market by checking production and diminishing the 
flow of wealth in the Market. From this arises the Price- 
Raising Monopoly which raises prices, lowers wages and 
diminishes the opportunities which are common to all. 
Those who maintain this sort of monopoly employ certain 
legal privileges which have a value in the Market and are 
capitalized, and the owners of these privileges are com¬ 
monly called ‘‘capitalists’^ and are confused with real capi¬ 
talists. But they are not capitalists in the economic sense, 
but mere parasites, and their profits are all stolen wages. 
But “capitalists” of this kind do not employ labor, for if 
a price-raising privilege is exerted in behalf of any labor- 
employing agency it will be found, upon examination, that 
the privilege is merely a defensive price-raising privilege 
(like the Tariff) which exacts its profit by robbing the other 
sort of privilege and not by the robbery of labor. Defen- 
sive-Price-Raising Privileges are the horns of the industrial 
Taurus by which he tosses and gores the common enemy of 
INDUSTRY, the non-industrial or destructive exploitation of 
the dependent industrial functions, and by so doing reduces 
the restrictive drag of those whose profit is derived from 
checking production only. To be a robber or an assassin 


THE HOUSE OF BUSINESS POLICY 63 

is one thing; to be a robber of the robber or an assassin of 
the assassin, is another. 

Again it is true that the vast numerical preponderance 
of the directed laborers in this and in all other states is 
employed by concerns which have but a few men, and with 
all these men the employer sustains intimate and friendly 
relations. The typical capitalist is not the great concern, 
employing thousands of men, or the wealth-swollen porcine 
gentleman depicted in the cartoons of the daily screamers. 
The typical capitalist is the little store-keeper with only one 
or two helpers; the little shop with a capital of a thousand 
dollars and two or three helpers. These concerns, without 
changing their essential character, grade up to concerns 
which may employ as many as 100 or 200 men, without 
losing in any degree the intimate friendly relation of the 
little shop. At the other extreme the very greatest and 
most ably conducted corporations have so subdivided their 
work (where high efficiency is sought) that they maintain 
an even greater degree of friendly interest in their skilled 
employees than the little shops do,—educating them at con¬ 
siderable expense and watching over them so as to ensure 
their success. They search the world for experts and, 
wherever they find merit, seek to obtain it. Many a rose 
would blush unseen but for them, and many a jewel of 
purest ray serene the dark, unfathomed caves of obscurity 
would forever hide, but for them. Carnegie boasted that 
he has made over 200 millionaires, and this boast was not 
an idle one. The great concern is ever looking for the men 
who have business and administrative capacity united with 
the sense of responsibility; if it does not do this it will die 
of dry rot. If there is a concern which seems to be pros¬ 
perous which does not do this, which is not eager to advance 
its responsible men,—more eager in fact than most of those 


64 


PUBLIC POLICY 


who are properly attending to their work are—beware of it; 
it is dying at the top, and some day it will collapse. As 
the rats desert a sinking ship, the wise employee will look 
around. Between these two extremes, the little shop where 
the men are all known to each other, and the big concern 
combing the world for talent, lies a sort of Saragossa sea, 
the Horse Latitudes” of the business world, where many 
an ancient mariner is becalmed. They constitute that por¬ 
tion of the business world which employs the least degree of 
skill and ability, many of them depending upon local con¬ 
ditions which compel recourse to them, and which will only 
progress under pressure. Here are to be found the petty 
cheats and frauds of the shifty incapables, the thimble- 
riggers and the shell-game workers of the business world. 
Some of them, like toad-stools grow up in a night and attain 
to an unwholesome prosperity at the expense of other 
legitimate businesses. These are the employers who do not 
want to pay their help and whose motto should be: ‘‘We 
aim to cheat.” If they do not do this, they can barely make 
out an existence, and such is the case with many honest but 
inefficient business men. Upon these alike, the cheats and 
the incapables, the demand for the periodic standardization 
of the advancing minimum wage is unwelcome. That de¬ 
mand is unwelcome to them alone of all employers, for all 
other employers of their own accord advance fixed wages to 
secure efficient help and it is this fact alone which has from 
the beginning made it possible for unions to form, to exist, 
and to exert a continuous pressure upon the deficient class. 
The uplifting infiuence of the superior methods in advanc¬ 
ing wages is irregular and inconstant. The union serves 
as a sort of governor or balance wheel communicating stead¬ 
iness to the pressure derived from the superior and more 
efficient employers of labor. Unions could not exist if 


THE HOUSE OF BUSINESS POLICY 


65 


wages were falling constantly ; it is only because fixed wages 
are on the whole rising, but unevenly rising, that they 
serve a useful purpose and are possible. 

The monstrous superstition maintained by the Socialists 
that the employers of labor, as a class, are the enemies of 
directed or employed labor, as a class, was derived by Karl 
Marx from the formulas of the Ricardian system taught in 
all of our colleges. We must not blame the Socialists for 
this; it is a crime for which we should hang the professors, 
not the honest believers who have taken these academic 
jokers at their word. We are taught by the thistle-eating 
crew in the colleges that by reason of the niggardliness of 
nature in not providing a sufficient extent of arable and 
fertile land for agriculture that the human race is com¬ 
pelled to engage in the production of the necessities of life 
on a constantly diminishing scale, and that a rising value 
therefore attaches to the ownership and control of the prod¬ 
ucts of labor. Price is supposed by them to be determined 
by the increasing cost of production, and the cost of pro¬ 
duction is determined by the increasing expense alleged to 
be necessarily put forth with diminishing result to maintain 
a bare existence. The professors are practical jokers; they 
picture to us a nightmare, and call it ‘‘science,’’ just as 
little boys in sport will draw a fierce looking picture and 
say: “That’s you!” Of course if it were true that de¬ 
creasing returns were the fixed and invariable condition of 
INDUSTRY, instead of the opposite, then every man who had 
enough for a meal would be the enemy of all the others, and 
vice versa. And naturally the capitalist, if he grows rich 
while the return to labor diminishes, does not benefit them. 
But, in fact, the return to labor grows slowly more. It has 
risen from the 30 or 35 cents a day which was the 16th 
Century ruin of the 15th Century $3.00 wage, to about 


66 


PUBLIC POLICY 


$2.00 per day. Under the slow but effective ministrations 
of the old-fashioned capitalists before the invention of mod¬ 
ern methods it had risen to 50 cents per day in the time of 
Burns. The factory owners of Manchester, Leeds and 
Liverpool at the beginning of the last century raised it to 
75 cents, and the steady improvement of method introduced 
by their successors has brought it up to the point where it 
is now two-thirds as much as it was in the days of the Guilds 
and the Religious Orders at the close of the medieval period. 
This record does not show that employers of directed labor 
are the robbers of labor. But it does most strongly suggest 
that something which we have not yet smoked out has 
deprived us, and is now depriving us, of the full benefit of 
the improvement of methods introduced hy employers or 
capitalists. 

The fundamental principle of the house op business 
POLICY is, therefore, the beneficence op business policy;. 
that it is the policy of the most efficient producers in the 
state of increasing returns (who control and who constantly 
seek to control the apportionment of all the products of 
labor) to maintain their control by the fall in price, 
THE RISE IN WAGE and THE RISE IN RENT. The SUperiO'T 
method excludes its rivals by voluntarily lowering prices. 
It secures the best help by voluntarily raising wages. It 
gets the best locations by voluntarily tendering more for 
rents. That is business policy. And the house of busi¬ 
ness POLICY is the **Church^^ of Business, its home, its 
workshop and its play-ground. 

4. The Electorate Of The House Of Business Policy 
Is Limited To The Employers Of Directed Labor In 
The State of Illinois, Voting Proportionately According 
To The Amount Of Wages Paid. —The act under which 
THE HOUSE OP BUSINESS POLICY is to be Organized provides 


THE HOUSE OF BUSINESS POLICY 


67 


that every employer of labor in this state must annually 
report to the Secretary of State the name and address of the 
business and state the amount of wages (fixed wages, com¬ 
missions, payments for piece work) paid out during the 
year. The concern must cast its vote as a unit (that is, 
partners or directors must agree), whether an individual 
person, a partnership, or the directorate of a corporation. 
Every individual employer who employs no more than him¬ 
self (a banana peddler, for instance, for the whole preced¬ 
ing year and who is still in business) is entitled to one 
vote. Others are entitled to one vote in addition for each 
$300 paid out in wages during the year, fractions not being 
counted. Thus the peddler who employs himself votes but 
one vote; if he has a helper to whom he pays out $300 in 
wages during the year he votes twice. The qualification of 
these electors may be inquired into by certain officials, but 
not iu such a manner as to disclose their business secrets. 
These electoral concerns are under strict compulsion to 
make these reports and to participate in the ensuing elec- 
tion,''and the failure to do so without just cause will subject 
the'offending business to severe penalties. These constitute 
the entire electorate of the house of business policy. 

5. The Senate Of Business Policy Is A Council 
Composed Of Employers Of Labor Elected From The Body 
Of The Employing Capitalists Of The State Vested With 
The Legislative Power Of The House Of Business 
Policy. —Business men have a solidarity of interests, just 
as workmen looking for better pay may have. Their 
interest that is common is to standardize the least efficient 
methods employed, just as the laborers wish to standardize 
the minimum wage. By elevating the^ methods and ex¬ 
cluding fraudulent practices of their own members towards 
each other, towards the public and towards their help, the 


68 


PUBLIC POLICY 


ancient guilds ruled so well^ that the socialist Hyndman 
says that but one strike is known to have occurred during 
the whole of the medieval period, when forty tailors went 
out and stayed out one-half day somewhere back in the 13th 
Century. History does not say whether they lost or won 
the strike. As it would be manifestly impossible to employ 
any other way than the representative system in composing 
this Senate, the electors will vote for the entire body under 
a proportionate system of nomination and election, so that 
the members of the Senate will represent the various sorts 
of business interests in the State in the proportion of their 
wage-paying power. This, however, does not mean that the 
concerns which individually pay the most wages will have 
the largest representation. On the contrary, the propor¬ 
tional system will nominate and elect as the controlling 
majority of this board the representatives of the small busi¬ 
ness men of the State who collectively pay out five times 
as much wages as the others. Of the 1,146,173 male voters 
participating in the presidential election in this State in 
1912 how many of them were employed by the concerns 
fioating in the ^‘Horse-Latitudes’^? How many by the 
great corporations? We have a State Bureau of Labor Sta¬ 
tistics ; it might tell us something about that. Immediately 
upon the organization of the Senate the inner principles 
of Business Policy will begin to disclose itself, and the 
Senate will deliberately proceed to reform the abuses from 
which business men and employees have long suffered. 
They will enact such ordinances as their experience will 
suggest in the direction of organizing all the directed 
laborers of the State. This organization of the directed 
laborers of the State, to be effected under the ordinances 
of the Senate, will include all the directed laborers who 
are employed in this State and the ordinances of the Senate 


THE HOUSE OF BUSINESS POLICY 


69 


will be obligatory upon all employers of labor working in 
this State. 

6. The Substitute For The Trades Unions In The 
House Of Business Policy Will Be The Board Of 
Administration Of Business Policy Composed Of The 
Officials And Body Of Directed Laborers. —The organi¬ 
zation of directed laborers is called “the board of admin¬ 
istration OP BUSINESS POLICY.^' It will have the powers 
of a grand jury, both generally and in its local organ¬ 
izations and branches, for the purpose only of inquir¬ 
ing into violations of the ordinances of the Senate. For 
this purpose it can summon witnesses and compel their 
attendance before its tribunals, and it will have officers 
employed to prosecute its grievances in the courts of busi¬ 
ness POLICY. In addition the Board of Administration will 
have other broad powers. It will have the power to pension 
its members and to insure them against sickness, old age 
and death. The fact that all the directed laborers of the 
State are of necessity members and that it will continue 
with an ever increasing membership, will permit it to take 
advantage of the experience of the various accident and life 
and fire insurance companies, and thus to take over all the 
business of the existing insurance companies. Thus the 
Board of Administration of Business Policy would be an 
imposing reality, far more substantial than the present 
labor organizations which it succeeded. For its expenses, aB 
a labor organization w’ould be small. If the revenue derived 
from its insurance business would not sustain it, emplo^^ers 
could be compelled to take out of the wages paid to em¬ 
ployees a certain amount, to be determined by the vote of 
employees (not necessarily more than ten cents a week for 
unskilled labor), which would be sufficient. Labor would 
thus be housed in a worthy temple, with ample means of 


;70 


PUBLIC POLICY 


securing for itself its legitimate demands and it would have 
behind it the power of all the employing capital of the State 
in the courts op business policy to enforce these demands. 

7. The Court Of Business Policy Consists Of A Cer¬ 
tain Number Of Experienced Business Men Elected From 
The Electorate Of The House Of Business Policy And 
By That Electorate Exclusively. —The Judges of the 
Court of Business Policy would he elected at large from 
the State proportionately in the same manner as the 
membership of the senate of the house op business 
POLICY, whose ordinances they interpret and apply. Com¬ 
plaints against employees and employers would be heard by 
this body and their decrees, except so far as some question 
of statutory or constitutional law was concerned, would be 
final. If any business concern should fail or refuse to 
comply with these decrees, the court would have the power 
to appoint a receiver and wind up the business condemned 
by it. The employee who in like manner stood in contempt 
would be punished by exclusion from employment in the 
State and by other penalties. 

8. In The House Of Business Policy The Whole Of 
The Body Of Active Employing Capitalists Meets The 
Whole Of The Body Of Directed Laborers In A Necessary 
Functional Relation. —All that is necessary to establish 
harmony between directed laborers and employing capital 
is that the whole of the body of one class should, as such, 
be functionally adjusted to the whole of the body of the 
other class. Capitalists and Directed Laborers are united 
as classes, and functionally related to each other, and the 
prejudices which have arisen from the nature of the acts 
of certain employers or employees, cannot change the per¬ 
manent and necessary nature of this relation. Capital, as a 
term in economics, means that sort of control over the 


THE HOUSE OF BUSINESS POLICY 


71 


apportionment of the flow of goods which is possessed by 
those who lower prices by increasing production. It is 
Price-Lowering Monopoly. It cannot control the flow of 
goods except by lowering prices, raising wages and increas¬ 
ing the opportunities common to all. Real Capital there¬ 
fore cannot exert its power in a manner in any degree 
whatever hostile to the interests of directed labor. In the 
struggle to exercise this price-lowering control real capital 
must encounter the opposition of that power which seeks a 
proflt from restricting production for the purpose of raising 
prices with the effect of lowering wages and diminishing 
the opportunities open to all. When real capital, seeking 
to increase production, flnds itself checked in this manner 
it clothes itself by the aid of government with Defensive 
Privileges which produce a complex series of results that 
ultimately indirectly work out beneficial consequences, rais¬ 
ing wages and increasing the opportunities for employment. 
In this contest the great capitalists, fighting for their price¬ 
lowering control, are fighting the battles of all directed 
laborers. The employing capital and directed labor both 
have a common enemy, and that is the vast inert oppressive 
weight of the unproductive purchasing power represented 
in the total value of the agricultural, mineral and forest 
lands, an amount equal to $50,000,000,000, not a dollar of 
which has ever employed a day^s labor while so invested. 
Upon this vast sum all labor and capital must pay interest; 
there is where the colored gentleman has his principal 
hiding place in the woodpile. But when the whole body of 
directed laborers and the whole body of Capitalists are 
brought directly by organization into the functional rela¬ 
tion which they naturally sustain to each other, all their 
class struggles and antagonisms will cease. Labor troubles 
will be quickly decided, and the industrial organism will be 
prepared to endure easily the stress of unlimited prosperity. 


CHAPTER III 


THE SEVENTY-FIVE BILLION DOLLAE ISSUE OF THE 
IMPEOVEMENT BONDS OF THE UNITED STATES 

1. The Idle Capital And The Idle Lands Of The United 
States. — Industry is afflicted with a disease common to all 
nations which, except among the most energetic and pro¬ 
gressive peoples, negatives all the gains derived from the 
improvement in business methods, causing the whole of the 
value of these improvements to be absorbed in the useless 
and fictitious value of the agricultural, mineral and forest 
lands. This condition arises as a development of the Public 
Policy of the least intelligent elements necessary to make a 
district majority, and more particularly, is due to the 
criminal stupidity of the teaching authorities in the schools 
and colleges who expound that policy,—the policy of those 
who know next to nothing at all,—in academic form as 
their spurious “Science of Political Economy.” To better 
understand the concrete situation the following diagram 
may be consulted. 

Explanation of Fig. 1.—The large outer square, repre¬ 

sents the total area of continental United States, 3,025,000 square 
miles, or ( 1 , 739 . 4)2 equal to 53 times area of Illinois. 

The area of A-B represents the waste, mountain, swamp and desert 
land of the above area or 916,542 square miles, or 586,586,880 

acres, equal to 16.17 times area of Illinois, which contains in it 56,665 
square miles and worth on the average as a whole $17 per acre. In 
the area A-B, wholly useless for agriculture, are most of the mines, of 
which for every one in use there are five equally good (apart from 
copper, silver and gold mines) that are not in use. 

72 


I 

V 

^ UNITED STATES IMPROVEMENT BONDS 73 

^ The square represents the fertile lands of United States, an 

•; area 1,452 miles square or 2,109,058 square miles, 37 times the area 
\ of Illinois. 

■ 1 ' ‘The square represents the area of cultivated and improved 

lands of continental United States, 864 miles square, or 747,581 square 
miles, equal to 13 times the area of Illinois. 





could have been raised if farmed with ‘ ^ average ’ ’ eflSciencj. It con¬ 
tains 373,790 square miles, is 611 miles square, and is equal to area 
of 6 % states of size of Illinois. 










74 


PUBLIC POLICY 


The square represents the area within which could be placed 

in families of 5 th^ entire 53,000,000 of the cities,* on lots 50x125 feet 
with appropriate streets and alleys. It is 81.33 miles square and is 
1/333 of the area of containing 1,000 square miles less than 

New Jersey. It exceeds the combined area of all cities of United 
States, and is of greater value than all the other land. 

The area “B-C” represents the 1,461,477 square miles of wholly 
unused fertile land within continental United States, 24 times the 
area of Illinois. 



Figure 2. Continental United States in Squares of Size of Illinois. 


Explanation of Figure 2.—This drawing represents the area of 
continental United States in 53 squares of the area of 56,665 square 
miles, or 238 miles square, each. 

A equals the area of the cultivated and improved land, 13 squares. 

B equals the area of uncultivated, unimproved fertile land imme¬ 
diately available for cultivation and tillage, 21% squares. 

B' equals the area of uncultivated, unimproved fertile land which 
requires drainage and irrigation, 2% squares. 

C equals the area of waste, desert and mountain land, 16 squares. 

Thus we find that there are within the limits of conti¬ 
nental United States 1,350,000,000 acres of fertile land, of 
which 100,000,000 require some drainage or irrigation to be 
made immediately available. This land, irrespective of the 
improvements upon it, as mere bare land, is rising in value 
or market price all the time, and is to-day '‘worth'’ 
$40,000,000,000, or on an average $30 per acre. In addition 














































UNITED STATES IMPROVEMENT BONDS 


75 


to this tillable land there is the area of mineral, forest and 
so-called ‘‘desert” land which for various uses is to-day in 
the same manner increasing in price, so as to be “worth” 
on the market $10,000,000,000. This land-value charge for 
the non-urban lands of the United States is a debt, in the 
nature of a mortgage, upon all the industry of the country 
which constantly increases with every advance in material 
progress. The titles to these lands have absorbed more 
than fifty billion dollars of the available capital of the 
United States, probably enough to finance the European 
War to its final conclusion. Every dollar of this vast sum 
is withdrawn from productive employment. Not a dollar 
of it has ever hired a day ^s labor. The only productive use 
this “capital” serves is that it may be employed, and is 
employed as a basis of credit in the state of minimum inter¬ 
rupted increasing returns to uphold the Market in its 
price-lowering control of apportionment, although it is 
itself, in its present place, not capital, but it is the value 
of a price-raising monopoly. Before any man can engage 
in the agricultural business he must pay out so much of his 
capital for the land before he can invest anything whatever 
in the improvement of the land. It is useless to say that 
this vast sum of fifty billion dollars does not exist; that it 
is a mere estimate of values or a figure of speech. Pick out 
100 acres of fairly good land, and you will have to pay 
$5,000 for it. Add to that payment for the 100 acres the 
payments required to be made for the others and you will 
find that the agricultural industry of the United States 
has actually got forty billion dollars, approximately, “in¬ 
vested” in the mere titles to the land. Here is a vast 
purchasing power that is not applied to any productive use. 
The money paid for the land has not compensated the labor 
that surveyed, explored, discovered or created it; it has not 


76 


PUBLIC POLICY 


paid the labor that has reclaimed it. This money has not 
purchased and installed any improvements whatever upon 
it, for the value of all of these improvements and the cost 
or value of all reclamation is expressly excluded. It is 
contrary to Business Policy that so vast and increasing a 
fund be withdrawn from productive use. In the unneces¬ 
sary absorption of this value by the land titles lies the 
secret of business depression. For by pumping credit from 
this morass by the Tariff System a little spurt of life and 
new blood is made to course through the arteries of our 
anaemic industry. Then as we slacken, or fail to increase, 
the pumping, again the credit and purchasing power of 
INDUSTRY drains into this Great Dismal Swamp. Here we 
encounter, then, the first problem of constructive Business 
Policy, which is: How can this enormous fund of fifty 
'billion dollars^ worth of real purchasing power be sep¬ 
arated from its present containers^ and without confiscation 
or any loss whatever to those who have so invested, be ex¬ 
pended productively and constantly kept in active and 
productive use? Hoio can the yield of agricultural labor 
on the area now ineffectively tilled be so increased as to 
produce a constantly increasing ratio of food-products so 
as, at the same time, to lower for the cities the cost of 
living, and increase to the agriculturist the value of his 
total crop? 

We have $50,000,000,000 of absolutely idle capital;* 

* As the value of this land is in the nature of a mortgage debt it 
really evidences the existence of $100,000,000,000 of idle capital. For 
the payment of rent or interest on the $50,000,000,000 value of these 
lands withholds that amount of capital from productive use. This 
debt would be cancelled by the Singletax which would cancel the debt 
by destroying the value of all agricultural lands. If then, a credit of 
that amount was advanced to the owners as compensation and pro¬ 
ductively expended, the existing working capital would be increased 
by the sum of $100,000,000,000, or ten times the total capital employed 
in the United States in 19101 


UNITED STATES IMPEOVEMENT BONDS 77 

871,000,000 acres of absolutely idle fertile land, and we 
have millions of unemployed men. After we have accom¬ 
plished the heroic organization of government and estab¬ 
lished THE HOUSE OF BUSINESS POLICY, then the next step in 
the unfolding of our superior civilization, disclosing to the 
world the mystery hidden in the constitutional life of the 
Great Kepublic, will be the seventy-five billion dollar 

ISSUE OF THE IMPROVEMENT BONDS OF THE UNITED STATES. 

2. Industrial Progress During The Nineteenth Century 
Contrasted With The Teachings Of The Schools.—Thomas 
Robert Malthus (b. Feb. 14, 1766, d. Dec. 29, 1834) ob¬ 
tained a copy of the first census report of the United States, 
published in 1790. In this report it appeared that the 
population had doubled every 25 years. Upon this he 
founded his famous theory that population tended to in¬ 
crease at a geometrical ratio while the produce of the labor 
of this population could only increase at an arithmetical 
ratio by the addition of a like amount of product at close 
of the 25-year periods, as shown by the following tables for 
population and “subsistence,’^ i.e., the product of the labor 
of this population: 

Malthus’ forecast for the years— 

1790 1815 1840 1865 1890 1915 
Population in millions... 4 8 16 32 64 128 

Subsistence for millions. .4 8 12 16 20 24 

That is, by the year 1915 there would only be provided 
subsistence for 24 out of every 128 persons of the popula¬ 
tion, or for 24,000,000 out of the assumed 128,000,000. The 
population of the United States is now (1916) supposed to 
be in the neighborhood of 100,000,000, and, in fact, to be a 
trifle in excess of that, so that it has nearly maintained the 
rate of increase that Malthus predicted. As given by the 
Census it has been for the decennial periods as follows: 


78 


PUBLIC POLICY 


1790 .. 

Population 
... 3,929,214 

Increase 

Per Cent 

1800 .. 

... 5,308,483 

1,379,269 

35.‘i 

1810 .. 

... 7,239,881 

1,931,398 

36.4 

1820 .. 

... 9,638,453 

2,398,572 

33.1 

1830 ... 

... 12,866,020 

3,227,567 

33.5 

1840 ... 

... 17,069,453 

4,203,433 

32.7 

1850 ... 

... 23,191,876 

6,122,423 

35.9 

1860 ... 

... 31,443,321 

8,251,445 

35.6 

1870 ... 

... 38,558,371 

7,115,050 

22.6 

1880 ... 

,.. 50,155,783 

11,597,412 

30.1 

1890 ... 

... 62,947,714 

12,791,931 

25.5 

1900 ... 

... 75,994,575 

13,046,861 

20.7 

1910 ... 

... 91,972,266 

15,977,691 

21.0 


The Daily News ^^Year Book^^ for 1916, from which the 
figures above are taken, says: 

^ ‘ The census bureau classifies as urban population that resid¬ 
ing in cities and other incorporated places of 2,500 inhabitants 
or more. The proportion of the total population of continental 
United States living in urban and rural territory at the census 
of 1910 and 1900 was as follows: 


-1910- -1900- 

Population Pet. Population Pet. 

Urban . 42,623,383 46.3 30,797,185 40.5 

Eural. 49,348,883 53.7 45,197,390 59.5 


Total ...... 91,972,266 100.0 75,994,575 100.0 


*^In 1890 the per cent of the urban population was 36.1 and 
of the rural 63.9; in 1880 the urban population was 29.5 and the 
rural 70.5. 


Continuing, the “Year Book’’ says: 

Comparing the rate of growth in urban and rural commun¬ 
ities, it is shown by the census bureau that during the period 
between the census of 1900 and that of 1910 the increase in 



























UNITED STATES IMPROVEMENT BONDS 


79 


urban population in continental United States was 11,013,738, 
or 34.8 per cent, while the increase in rural population was 
4,963,953, or 11.2 per cent. There had been an increase in 
urban population in every state, while in six states there had 
been an actual decrease in rural population. These states were: 
New Hampshire, 5.4 per cent; Vermont, 4.2 per cent; Ohio, 
1.3 per cent; Indiana, 5.1 per cent; Iowa, 7.2 per cent; Mis¬ 
souri, 5.1 per cent.” 

This acceleration of the rate of growth of the population 
of cities over the rural communities has continued and later 
publications of the census bureau give the estimates for 
1915 as reversing the proportions of 1910; that is, the urban 
population is supposed to contain 53,000,000 (having in¬ 
creased 1,300 times what it was in 1790) and the rural popu¬ 
lation to contain 47,000,000 (or only 15 times more than 
that of 1790) of the estimated total population of 100,000,- 
000 in continental United States. Hence we find that the 
urban population has increased over 80 times faster than the 
rural population. 

In 1790 the cities of the United States contained about 
10 per cent of the entire population; they have continually 
increased in population faster than the rural communities, 
and are increasing with an accelerating rate. If they now 
contain 53 per cent, in another ten years they will contain 
60 per cent. The people living in cities are better off than 
the rural people; they receive better pay, live in better 
homes, have more of the creature comforts and they see more 
of the deviUs pomp and pageantry. Their milk is just as 
fresh; their butter is better; they get the best steaks and 
chops. That is the reason the country population keeps on 
coming to the cities and when they arrive, they stay there. 
But, while the urban population is better off than the rural 
people, the rural industries have vastly improved since 
1790. In Washington’s time the “Father of His Country” 


80 


PUBLIC POLICY 


could not market his grain except by converting it into 
whiskey. The farmers of Pennsylvania rebelled at the 
excise tax in President John Adams’ time because they had 
no market for their grain unless they could make whiskey 
of it and raft their produce down the Ohio. The entire area 
of fertile tillable land available for cultivation in 1790, 
from which the agricultural produce could be transported 
to market by water or wagon routes, was not much greater 
than the area of the state of Illinois. Since that time, by 
the steam railroad, trolley and automobile, and by the use 
of steam freighters of great capacity on the water, the 
whole of the fertile area of the United States has been 
made available, that is, an area 37 times the area available 
in 1790. During this time the population of the rural dis- 
trics has increased but 15 times what it was in 1790, so that 
for every would-be agriculturist there is more than twice 
as much fertile land available for cultivation as there was 
in the days of the pioneers of 1790. The land lies there, 
fenced up and unused, with the railroads, trolleys and auto¬ 
mobile roads running all through it, 871,000,000 acres, an 
area 24 times the area of the state of Illinois, on which no 
plough has ever traveled. It is scattered about the country, 
reaching up often to the margins of great cities, but which 
if massed in one compact body would make a tract 1,116.86 
miles square, containing 1,361,477 square miles. That is, 
we have an area of totally unused agricultural land that is 
equal to the combined areas of Great Britain, France, 
Austria, Italy, Serbia, Bulgaria, Belgium, Portugal and the 
entire Turkish Empire. If we add to this area of fertile 
land that additional area which is equal to one-half of the 
region that is cultivated on which the yield averages only 
half a crop, and consider that, by reason of inefficient 
farming, as also unused, we could increase our space of 


UNITED STATES IMPROVEMENT BONDS 


81 


vacant unused and fertile land by an amount equal to the 
addition of another Great Britain and the whole of the 
German Empire. There is not, therefore, the slightest 
doubt that the unused area of the fertile land of the United 
States, without any noticeable improvement in method of 
cultivation, could support in comfort the whole of the 
present ‘opulation of the United States and Europe. 

During the period since 1790 not only has the area of 
available fertile land increased twice as fast as the agricul¬ 
tural or ‘‘rural’’ population (the population living outside 
of the towns of 2,500 or more), but the productiveness of 
the agricultural labor has been increased by improvements 
in transportation and in agricultural machinery, so that 
now each agricultural laborer, according to reports of the 
census bureau, produces 15 times as much in the same time 
with less toil than his predecessor did in 1790. That is, the 
yield of the agricultural labor is (fifteen times fifteen) 225 
times as great as the agricultural labor of 1790, although 
the population of the entire United States is but 30 times 
as great. That is, it is now, or ought to be, 7.5 times as easy 
to get a loaf of bread, or other agricultural product, for 
each inhabitant of the country, as it was in 1790.* 

This increase in the productive power of agriculture, as 
well as the increase in the area of available fertile land, has 
been entirely due to the labors of the inhabitants of cities. 
They introduced, constructed and operated the railroads, 
steamship lines, trolley lines and the automobile industry. 
They have invented, manufactured and improved the agri- 

* Hence Henry Carey, repudiating the Ricardian formula of rent, 
truthfully said that the movement of the increase of the population 
was not from good land to worse land, but from good land to better 
land. For by reason of these improvements the available land has 
increased in quantity and utility. There was no land as productive 
in 1790 as the average field of today. 


t>UBLlC POLICY 


cultural machinery. If the farmer is now able to produce 
15 times as much in the same time with less toil than his 
great-grandfather, that increase in productive power has 
been given to him by the labors of cities. Not only is this 
true historically, so far as the past is concerned; it is also 
true of the present. For without the continuing labors of 
cities he would now have no railroads, trolley lines, steam¬ 
ship lines, automobiles or farm machinery, and his wife 
would be obliged to cook in a fireplace, light the fire by 
flint and steel and spin the cloth for the family clothing. 
“Hog and Hominy’^ would be his principal diet, supple¬ 
mented by corn meal and sorghum. His dwelling and fur¬ 
niture would be rough logs, and his soap would be the 
pioneer^s “soft soap.^’ He would plough with a primitive 
scoop, cut grain with a sickle, thresh with a flail and carry 
his grain to market in sacks on the backs of horses. Hence 
it follows that fourteen-fifteenths of the increase in the 
productive power of the agricultural labor being due to the 
present labors of cities, fourteen^fifteenths of the actual 
product of the agricultural labor of the country is nom 
produced by the labors now carried on in cities. But if the 
cities now produce 0.933 of the agricultural yield of the 
country, why does not the urban population increase 
faster? Why does the agricultural industry lag behind 
all other forms of industry in the United States in effi¬ 
ciency? There is not a carpenter, blacksmith, paper- 
hanger, painter or tradesman of any kind who could earn 
a living if, in efficiency, he did not far surpass the average 
efficiency of the agricultural laborer. The answer is that 
the industries of cities pay only price-lowering rent, are 
not subject to the drag of price-raising rent and they can 
invest their capital productively. But with the agricul¬ 
turist a very large and increasing percentage of his capital 


UNITED STATES IMPROVEMENT BONDS 


83 


must be unproductively invested or expended (for it is not 
strictly speaking an ‘‘investment”) in the payment of rent, 
or in the price of agricultural land. In other words, the 
increase in the productive power of agricidtural industry, 
due to the present labors of cities, does not return again 
to the cities to purchase the tools and machinery to develop 
the land and to increase the prosperity of both the rural 
and the urban industries, but is swallowed up in the utterly 
useless price-raising value of the agricultural land. 

The same condition exists in all other countries. The 
cities of Europe have increased in like manner faster than 
their rural population. There also, as here, the greater part 
of the yield of agriculture is directly due to the labors o£ 
their urban populations. 

Here then we have reached the answer to the Malthusian 
assumption, as stated by Ricardo in 1809: 

‘‘If, then, good land existed in quantities much more abun¬ 
dant than the production of food for an increasing population 
required; or, if capital could be indefinitely employed without 
a diminished return on the old land, there would be no rise 
of rent; for rent invariably proceeds from the employment of 
an additional quantity of labor with a proportionately less 
return. ^ * 

Works of David Ricardo (McCulloch), 1888, p. 37. 

The “rent” he is talking about is agricultural rent, the 
fictitious value arising from the withholding of agricul¬ 
tural land from use, not the real rent known to Political 
Economy as that paid to substitute superior for inferior 
uses not excluded by the fall in price and the rise in 
WAGE. But on the ‘ ‘ Old Land, ’ ^ both in Europe and in the 
United States, there has been and is an indefinite continua¬ 
tion of the increase in the application of capital with 
increasing returns; the yield increases and the area that 


84 


PUBLIC POLICY 


is available increases always faster than the ability of the 
rural population to employ it. Professor Senior, in 1850, 
l)ointed out that in Great Britain there were great varia¬ 
tions in agricultural efficiency and that great areas of fer¬ 
tile land were wholly unused, so that Ricardian conditions 
did not, in fact, exist there. In fact, there are now in Great 
Britain 17,000,000 acres of unused fertile, tillable agricul¬ 
tural land on which could be supported, by intensive cul¬ 
ture, by methods now employed in many places, the entire 
population of Germany, Austria, Great Britain and France. 
That is, the 17,000,000 acres could be cut up in lots 50x125 
feet and glass-roofed gardens made of them, each of which 
would ^pport 10 persons. Krapotkin made a truck garden 
of a six-story brick building, 50x100 feet, and by it sup¬ 
ported 65 persons for 5 years entirely out of the money 
realized by the sale of the produce in the public markets of 
Paris. 

The steam engine was invented by Captain Savery in 
1698; in 1769 Watt invented the separate condenser which 
made the engine practically useful, and at the same time the 
spinning machinery came into use which made the great 
factory towns of England. Immediately a tremendous! 
demand set in from the new factories for labor, and the 
peasants of England began to be released from their sla¬ 
very to the country squires, so that their wages rose first 
in the cities and then in the country. The squires, still 
owning Parliament, tried to steal a portion of the increase 
in wage resulting by raising the price of grain by the Com 
Laws forbidding importations of grain. The confiict be¬ 
tween the cities and the agricultural land owners raged 
until the cities became strong enough to compel the repeal 
of the Corn Laws. The price of a loaf of bread then fell 
in one day from 25 cents to 5 cents. This was all known 


UNITED STATES IMPKOVEMENT BONDS 


85 


to the founders of the Ricardian system. There was noth¬ 
ing in their time to suggest to them that diminishing returns 
was the necessary condition of industry except the political 
necessity of repressing agitations which might have led to 
revolutionary movements, and their base servility to the 
country squires who wanted to steal the profits of urban 
labor by restricting the importation of food to the urban 
population. 

3. Political Economy Is The Science Of The Absolute 
Dominion In The Market Of The Price-Lowering- and 
Wage-Raising Monopoly By The Final And Absolute Ex¬ 
clusion By Protective Taxation Of All Forms Of Price- 
Raising- And Wage-Lowering Monopoly. 

(a) Increasing returns are necessary to the existence and 
continuation of all forms of associated production. As all 
men seek to gratify their desires by the least toilsome exer¬ 
tion, so they associate in production for the purpose of 
apportioning among themselves the gain that results from 
association. If, instead of a gain, there was a loss resulting 
from association, they would scatter. The ‘‘centripetal” 
force which holds them in communities is the attraction of 
an actual gain. The laws of trade and all association are 
beneficent natural laws; however selfish or malignant Mam¬ 
mon may be personally he cannot make his profit in the 
Open Market except by making some sort of a libation to 
the free spirit of Civilization,—as the Avesta says, “fo the 
Glory none by force can seize. Superficial writers imagine 
that mere greed, not productiveness, is the source of profits, 
but the selfishness of business men is merely the motive 
which prompts them as individuals; it does not preside 
over the apportionment of the wealth produced. A benefi¬ 
cent moral law presides over this apportionment, viz., the 
law expressed by the precept: “To him who hath (as a 


86 


PUBLIC POLICY 


result of increased production) shall he given, and from 
him who hath not (produced as much) there shall he taken 
away even that which he hath.^^ Increasing returns, or 
continuity in improvements, is inevitable in industry, be¬ 
cause the moral imperfections of human nature cannot be 
imparted to the beneficent laws of trade. It is otherwise 
with SERVICE and government. In industry alone con¬ 
tinuity of work means increase in efficiency. 

(h) The laws of distribution according to the erroneous 
Ricardian system of economics adopted by Henry George 
and the majority of the professional economists. In 1809 
David Ricardo published his ^‘Principles of Political 
Economy and Taxation. ’ ^ He had been the leading banker 
in England and was a sort of J. Pierpont Morgan in his 
time, very closely identified with the governmental policies. 
He was a clear and forceful writer; the ability, which had 
brought him into a position of great national trust and 
authority from a beginning as the disinherited son of a 
Portuguese Jew, did not desert him when he composed this 
book. It has been for a century the standard of all academic 
“Political Economy.’’ It is founded on the assumption 
that all production is carried on in the state of diminishing 
returns in agriculture by reason of the limited quantity of 
fertile land and the tendency of the population to increase 
so rapidly in numbers that recourse must continuously be 
had to land of diminishing fertility; or, that an increasing 
amount of labor and capital must be applied to the “old 
land” with the result that there is a diminishing, dis¬ 
proportionate return from the employment of the addi¬ 
tional amount of labor and capital. In either case, there 
would necessarily be awarded no more to labor and capital 
than a bare subsistence. The laborer received as (fixed) 
wages no more than the amount required to sustain him 


UNITED STATES IMPEOVEMENT BONDS 


87 


and enable him to live and reproduce his species the ‘‘cap¬ 
italist^' received no more than the amount required to sus¬ 
tain him in his labors and replenish his capital. All the 
excess above this bare subsistence to both labor and capital 
was taken as ‘‘rent." The exaction of rent followed as a 
necessary consequence of the decline in returns to agri¬ 
culture in which it was assumed that it was increasingly 
difficult for each generation to sustain itself. He paid no 
attention to the industrial functions of cities; they were 
generally supposed to be mere parasites upon the real pro¬ 
ductive labor of the rural districts,—given over to luxury, 
extravagance and waste. This was a superstition inherited 
from the French “Economists" or Physiocrats who held 
that the only productive labor consisted of the direct appli¬ 
cation of the extractive processes,—a very crude and imbe¬ 
cile application of Cantillon's formula that *^All wealth is 
the product of labor applied to land,^* Under the system of 
Kicardo, Mill and George, all apportionment of the prod¬ 
ucts of labor is determined by Agricultural Bent. George 
presents, as the true formula of Rent, Mill's restatement of 
Ricardo's formula, as follows: 

‘ ^ The rent of land is determined bj the excess of its produce 
over that which the same application can secure from the least 
productive land in use.^^ 

George supposed that the entire produce of labor is 
divided into three portions, apparently as three divisions of 
the total quantity of tangible products, viz., Rent, Wages 
and Interest, and that the produce of labor is entirely dis¬ 
tributed as Rent, Wages and Interest, and that Wages and 
Interest receive only what Agricultural Rent leaves: 

•The Marxian conception of the ''proletariat,^' or "breeders," 
a term much used by the Socialists as a synonym for those earning 
Fixed Wages, is derived from this formula. 


88 


PUBLIC POLICY 


‘ ‘ Stated reversely, the law of rent is necessarily the law of 
wages and interest taken together, for it is the assertion, that 
no matter what the production which results from the appli¬ 
cation of labor and capital, these two factors will receive in 
wages and interest only such part of the produce as they could 
have produced on land free to them without the payment of 
rent—that is, the least productive land or point in use. For, 
if, of the produce, all over the amount which labor and capital 
could secure from land for which no rent is paid must go to 
land owners as rent, then all that can be claimed by labor and 
capital as wages and interest is the amount which they could 
have secured from land yielding no rent. 

Or, to put it in algebraic form: 

As Produce = Eent -|- Wages + Interest, 

Therefore, Produce — Rent = Wages Interest. 

Thus wages and interest do not depend upon the produce of 
labor and capital, but upon what is left after rent is taken out; 
or, upon the produce'which they could obtain without paying 
rent—that is, from the poorest land in use. And hence, no mat¬ 
ter what be the increase in productive power, if the increase in 
rent keeps pace with it, neither wages nor interest can increase. ’ ’ 
Progress and Poverty, p. 171, 25th Anniversary Ed. 

The original Kicardians openly and boldly stated their 
belief that all production was necessarily carried on in the 
state of decreasing returns, and upon this doctrine they 
founded their formula of rent. But, although George 
denied that decreasing returns was a necessary consequence 
of the increase of population, he nevertheless asserted that 
decreasing returns did now, in fact, exist and that they 
were due to the exaction of Speculative Monopoly Rent. 
Rent, or ^‘Economic Rent,” he defined to be that sort of 
rent which would be exacted if all land were put to its best 
use. Then there would be exacted from the user of land 
the excess of the produce above that which the same appli¬ 
cation could secure from the least productive land then in 
use, which would be the best land to be had for nothing. 


UNITED STATES IMPEOVEMENT BONDS 


89 


But, by withholding from use the vast areas of the fertile 
unused land, the owners are able to extract (Monopoly 
Rent) the excess above what the same application could 
secure from the best land under such circumstances to be 
had for nothing, or land on which only a bare subsistence 
could be had. Yet, in view of ^‘social progress,’’ there is 
the prospect of being able to extract more from them in the 
future; hence there is demanded even more (Speculative 
Monopoly Rent) than anybody can pay at the present time 
without a diminishing return, and this,—the exaction of 
Speculative Monopoly Rent,—is what causes the phenome¬ 
non of * ‘ Progress and Poverty. ’ ’ By reason of this exaction 
of Speculative Monopoly Rent the poverty of the masses 
increases and becomes the more hopeless the more the 
machinery and methods of production become effective. 

Now we can see from the facts set forth in the preceding 
sections that the statement of Henry George is not true. 
Labor has not and is not now receiving the full benefit, or 
anywhere near the full benefit, of the improvements in 
method which have so greatly multiplied the productiveness 
of labor during the past century. But wages have greater 
purchasing power, and the conditions in all industries and 
the opportunities in all employments are far better than 
they were at the beginning of the Century, and they are 
constantly growing better, although at a disappointingly 
slow rate. We are not being driven to “the jumping off 
place”; neither are we faced with any Sphinx-puzzle aris¬ 
ing from economic tendencies. Hence there is not even 
exacted the Georgian “Monopoly Rent,” except, perhaps, 
in times before panics, when instantly paralysis seizes upon 
great industries. For the condition of diminishing returns, 
if it affects at the same time the leading industries, imme¬ 
diately produces a panic and the cessation of all business. 


90 


PUBLIC POLICY 


Business can only he carried on in the state of increasing 
returns. 

If, as a fact of universal knowledge, the purchasing 
power of the Fixed Wages of directed labor, as well as the 
opportunities of employment, are increasing, then it is clear 
that rent does not take all above the excess to be procured 
from the least productive land in use. We find that not 
only are the returns to the agriculturalists rising,—where 
rent is the lowest—^but that the wages of labor in the cities, 
where rent is the highest, are rising so much faster that the 
increase of the population does not fiow out at all to the 
Ricardian ‘‘least productive land in use,’^ but to the most 
productive land in use in cities where they find better 
employment, an easier life and more opportunities for 
diversion. Even the tramps and hoboes come back to the 
City in winter, where they can live in luxury on 25 cents 
a day, or less. For the City is Opportunity; it does not 
knock but once at your door, but all the time it welcomes 
with open arms the increase of the population and makes a 
home for them. 

In George’s system, even under the most favorable cir¬ 
cumstances, the apportionment of wealth is determined by 
the return to labor under the most disadvantageous condi¬ 
tions. Rent, even under the Singletax proposed by George, 
is supposed to attach to an increasing area, and to exact all 
the “excess.” H^nce, although the bringing in of the 
Ricardian “Margin” to better land which could be had for 
nothing under the Singletax would raise wages and lower 
prices for the time the change was made, thereafter “social 
progress” (by which George means the Fall in Price and 
Rise in Wage) could not benefit anyone, since rent would 
continue to extract the “excess,” and wages,would still be 
determined by the return on the least productive land in 


UNITED STATES IMPEOVEMENT BONDS 91 

use. If rent continued to do this, and the population was 
compelled to resort to poorer land (that is, if rent then 
began to attach to an increasing area) then population 
would immediately begin to become subject to decreasing 
returns. (See ^ 17—Fallacy 5.) As wages would fall, the 
purchasing power of the day^s labor would be less, so that 
the condition that would ensue would be analogous to that 
of a Rise in Price with a corresponding Fall in Wage. 
Hence the rise in the Georgian rent has nothing in common 
with the economic Rise in Rent which rises with the Rise 
in Wage and the Fall in Price. 

Under the Ricardian and Georgian system all wealth is 
distributed, therefore, by the Rise in Price which appor¬ 
tions to all a diminishing wage, a decrease in the utility of 
the opportunities open to all and a rise in the rent of agri~ 
cultural land. 

(c) The Control of the Market and the Two Monopolies. 
—The gain resulting from association draws the multitude 
to share in it, and this gain they seek to divide and appor¬ 
tion among themselves. Those who would seize and appor¬ 
tion this wealth resulting from associated labor find that 
there are two opposite methods by which they may act; 
(1) they may check production by any sort of an exaction 
or tribute and compel the payment of a premium for per¬ 
mitting it to go on, or (2) they may increase production 
by improving their methods and by putting forth greater 
or more efficient efforts. 

From the first of these arises that sort of a monopoly 
with which all are most familiar,—the monopoly which 
derives its profits from the arbitrary exercise of physical 
force or legal privilege by means of which it restricts pro¬ 
duction or competition and raises prices. Professor Devas, 
to whom (with the exception, perhaps, of Proudhon), so far 


92 


PUBLIC POLICY 


as I know, belongs the credit of first perceiving this prin¬ 
ciple of classification, calls monopolies of this sort “Price- 
Determining” because they determine or fix prices by the 
legal privilege which enables them to exclude competition. 
Because monopolies of this sort are a source of irritation, 
they quickly made themselves felt by the pain of conscious 
loss, and the word monopoly/^ as descriptive of the condi¬ 
tion where a lesser number than all who are competing in 
a certain field are able to control and fix prices hy checking 
production, has become in popular language synonymous 
with PRICE-RAISING MONOPOLIES. 

As in the state of good health a person is not conscious 
of his internal anatomy, so the price-lowering monopoly 
does not directly make itself known. Few have thought of 
the Open Market as a Monopoly, in fact the Open Market is 
commonly supposed to be the very opposite of all that the 
word “monopoly” signifies. But, in fact, the Open Market 
is the tightest kind of a monopoly, vastly superior in 
power and control to any form of Price-Eaising Monopoly. 
It consists of all those who are engaged in associated pro¬ 
duction and who, in the act of production, do not employ 
any other power than their productiveness. They do not 
check or restrict the production and distribution of wealth; 
on the contrary every act of theirs tends by some degree 
or other to increase the quantity of wealth produced. The 
individuals, firms and corporations engaged in competing 
with each other hy means of their productiveness alone are 
not equal in their productive power, nor are the occupa¬ 
tions in which they are engaged of equal functional im¬ 
portance. As they do not all alike and to the same degree 
contribute to the gain arising from associated production 
they are the Differential Factors,^^ having each their pecu¬ 
liar individual Differential Costs^^ and realizing in like 


UNITED STATES IMPROVEMENT BONDS 


93 


manner each their own peculiar ^^Differential Gain.*^ As a 
general rule in the same market all similar products bring 
the same Price, consequently where a series of Differential 
Factors of diminishing degrees of productiveness, A, B, 
C, D, E, F, and G, are supplying the market, the increase 
in the productiveness of the superior producers A, B, C 
and D will cause them to put on the market, already fully 
supplied at the existing scale of prices, a very much greater 
quantity of goods than was supplied to the market before. 
The result will be that the excess would be unsalable at the 
old price; unless there is a Fall in Price the superior pro¬ 
ducers will be unable to dispose of their excess. But the 
superior producers will lower their prices just enough to 
dispose of them; as they lower their prices the other fac¬ 
tors are compelled to meet them, and the result is that the 
entire product of all the factors A, B, C, D, E, F, and G 
will be sold (or will so tend) at the price which enables the 
entire product to bring the largest amount. But this is a 
price which does not enable the factors F and G to recover 
their ‘‘Costs of Production,^^ and so they will be excluded 
from sharing in any of the gains of the Market and put out 
of business. The whole of the gain will be apportioned 
among the superior Differential Factors A, B, C, D and E 
and the general public, which receives the benefit of the 
Fall in Price. Now if we consider that all the producers 
of wealth who are contributing their products to the Market 
are in like manner excluding inferior methods which can¬ 
not recover in Price their differential “Costs of Produc¬ 
tion,’’ we can let the letters A, B, C, D, E, F and G repre¬ 
sent the entire series of producers who at any one time are 
contributing to the Market, and that of this series F and G 
are continually being excluded by the Fall in Price. The 
factors A, B, C, D, E and F, therefore, will be constantly 


94 


PUBLIC POLICY 


fixing prices, and by so doing they will determine the 
apportionment of all the products of labor exchanged on 
the Market. As they are constantly fixing Price, they de¬ 
termine the direction of the flow of the stream of tangible 
goods, and they determine that this stream of wealth shall 
flow to themselves, the Excluding Factors. By their su¬ 
perior productiveness they seize upon and apportion among 
themselves the whole of the tangible products. The instru¬ 
ment, or function, by which they do this is what has been 
termed abstractly Price, but which when examined is found 
to be THE FALL IN PRICE. Hence we And that industry not 
only produces wealth, but industry also distributes wealth. 
In the gravitation which produces the circulation of the 
tangible products of labor the centripetal force is the 
primary instinct by which every person seeks to gratify his 
desires with the least amount of trouble and is always eager 
to get something for nothing. It may be taken for granted 
that all men will take whatever they can get for nothing if 
the thing to be obtained is of utility to them. This instinct 
is the economic constant, being always the same in all men, 
and hence price is never an expression of the sense of the 
‘‘utility’^ of the thing sold. The price is determined by the 
variable productiveness of the excluding and excluded fac¬ 
tors, i.e,, by the extent of the donation made to the public 
by the Fall in Price necessary to exclude the marginal 
producers from the Market. 

Things produced by labor applied to land bring in the 
Market that Price which enables those superior factors 
which produce them to exclude the inferior factors and 
thus to maintain their complete control over the appor¬ 
tionment of all the products exchanged on the Market. The 
FALL IN PRICE is the donation which catches the trade, the 
honey in the nectaries of commerce which feeds the vast 


UNITED STATES IMPEOVEMENT BONDS 95 

associated swarms of industries. Without it there would 
be no trade, no commerce and no association in production, 
and there could be no Price, no values and no principle of 
apportionment. It is for this reason that Price-Raising 
Monopoly can never drain to the last drop the gain of asso¬ 
ciation, and therefore the nightmare of Marx and George 
is the result of a Gargantuan feast on Ricardian indigesti- 
bles. The vast price-lowering monopoly which is the Mar¬ 
ket, or CIVILIZATION on its industrial side, will work only 
in one direction,—the direction of increasing returns. 
When these returns are interrupted we have a panic; busi¬ 
ness ceases. But industry cannot continue except in the 
state of increasing returns. And when the machinery of 
production is in operation there is but one method possible 
to it,—the Differential Factors cannot put forth their 
utmost efforts to increase production without lowering 
prices and thereby excluding from all share in the indus¬ 
trial apportionment the inferior and obsolete methods which 
cannot recover in Price their Costs of Production, so that 
diminishing returns to inferior methods are the corollary 
of increasing returns. 

The price-lowering monopoly is the vast world of 
industry itself. Wherever there is a little shop-keeper, 
tradesman or producer of any kind who earns indeter¬ 
minate WAGE, or PROFIT, he is doing so by maintaining the 
exclusion of inferior producers who otherwise would, then 
and there, be employed. Every man who earns Indeter¬ 
minate Wage by the sale of the products of labor in the 
Open Market is a price-lowering monopolist, and to a lesser 
degree every skilled laborer, whose employment excludes 
less productive laborers, is also a price-lowering monopolist. 
The better workmen exclude the less efficient and cheaper 
workmen by their superior productiveness, and Fixed 


96 


PUBLIC POLICY 


Wages paid to directed laborers rise only as the less efficient 
laborers are excluded just as the Profits or Indeterminate 
Wage of employers'rise only as the fall in price excludes 
the inefficient 'producers. - Thus we find that the flow of 
wealth is always -Ijo one» or the other of these two sorts of 
monopoly,—the products of labor can be distributed only 
to pricetLOwering monopoly or to price-raising monopoly. 
As the two monopolies live together, the price-raising 
MONOPOLY is a parasite upon the other; -it is not necessary 
to INDUSTRY and its values cannot continue unless the price¬ 
lowering MONOPOLY also continues. As a parasite it diverts 
the flow of wealth from the differential price-lowering fac¬ 
tors and diminishes their wage or profit by arresting the 
Pall in Price, but its value would vanish thednstant the pall 
IN PRICE and RISE IN WAGE to the price-lowering differential 
factors ceased. 

(d}^The Ecorwmic Functions, — Price, Gross Wage or 
Value, Capital and the Wages-Fund, Fixed Wage, Interest 
and Rent. —As by the Fall in Price (which is Price as an 
economic •function) the'Superior producers exclude from all 
share in apportionment the inferior producers and thereby 
seize upon and apportion among themselves the whole of 
the products of labor coming to the Market, the stream of 
wealth resulting from the apportionment by the Fall in 
Price is Gross Wage, or the total sum realized by the pricing 
of the Market, or what may be termed Value. By Price the 
excluding factors maintain their price-lowering monopoly, 
or the Market, and the control they wield by it is Wage. 
Wage first appears as the total selling value of the product, 
which includes in it all the costs of production as well as 
the Net Profit, Net Indeterminate Wage, or the Wages of 
Superintendence. Thus in the costs of production will be 
included payments for material. Fixed Wages, Interest and 


UNITED STATES IMPROVEMENT BONDS 


97 


Rent, as well as all forms of tribute or blackmail levied by 
any price-raising privilege. None of .these items of expense 
or profit are estimated, or can be estimated in the terms of 
the tangible product itself. There is no possible com- 
mensurability between value, which is the power of con¬ 
trolling the apportionment of the tangible products, and the 
intrinsic qualities or utilities of the tangible products. The 
value of the products of labor is therefore something to be 
distinguished from the tangible product. That is, the labor 
which produces tangible articles of wealth by subjecting the 
natural media, or land in the economic sense, to the impress 
of a character which makes a natural force or substance 
available to human use, does not produce that tangible 
product alone. Besides the tangible product, human labor 
in association applied to land also produces an immaterial 
and intangible product, viz., the price-determined control 
over the apportionment of this tangible product, or Wage. 

The control over apportionment, when price-determined, 
is always beneficent; it can never be exerted without lower¬ 
ing prices and raising wages. It is in itself the primary 
form of Wage; out of it flow all other sorts of wage and 
wage-funds. It is the primary Wages-Fund, the imperfect 
perception of which has perpetually tantalized Professor 
Taussig of Harvard. When this price-determined control 
is exerted productively it is Capital. When it is appor¬ 
tioned to directed laborers as their share it is Fixed Wage. 
When it is apportioned to capitalists, as a stipulated or 
liquidated compensation for the loan of credits, it is Inter¬ 
est, and is the compensation paid to them for performing 
a necessary, industrial, judicial act. For the would-be 
borrowers A, B, C and D alike seek credit from the capi¬ 
talist. If D gets it, that credit will be squandered; the 
capitalist will not get back his loan, neither will the public 


98 


PUBLIC POLICY 


receive the Fall in Price or the Rise in Wage which would 
be the result of the efficient employment of that credit. 
If C gets it the capitalist may get back his principal, there 
will be but a slight prolongation of the struggle between C 
and the more efficient producers B and A, with little benefit 
to the public. If B gets the credit an existing efficient use 
will be maintained which by excluding with a greater Fall 
in Price inferior methods will command the higher wage 
that will ensure its ability to pay back the principal and 
the interest. But, if the credit is given to A a vastly 
superior use will be introduced from which will result a 
much greater Fall in Price and Rise in Wage, as well as an 
adequate return to the Capitalist. By the act of selecting 
and rejecting among the competing uses the capitalist per¬ 
forms a necessary industrial act without which there could 
not be the maximum Fall in Price and the maximum Rise 
in Wage. Hence the capitalist earns his interest and is a 
useful laborer just as much as any other industrial factor. 
But in a certain sense the capitalist performs an act of 
even greater significance and utility to Industry than the 
acts of those who carry on the direct work of production. 
For the capitalist, by the selection and rejection of methods 
to which he awards credit, is determining the direction of 
industrial growth. He is the judge of industrial or ‘ ‘ Busi¬ 
ness Policy’^ and wields all the powers of Industrial Gov¬ 
ernment. In assuming this office the capitalist gives his 
‘‘bond^^ for the faithful performance of his duties to so¬ 
ciety, if he makes a mistake he loses his ‘‘pay,^’ his wage 
or interest; or, if he makes a great mistake he not only 
loses his wage but his capital and his ^ ‘ job ’ ^ as well. If, for 
their small mistakes (to point out an analogous case) the 
judges of our courts were penalized in fines for their occa¬ 
sional bad judgments; or, for their greater ones obliged to 


UNITED STATES IMPROVEMENT BONDS 


99 


take.their victims^ places in the penitentiary, the situation 
would be similar. When the medieval mind questioned: 
“Can money breed moneythe question discloses a fun¬ 
damental fallacy of the public that is always coming to the 
surface. What the capitalist is loaning is not really metal 
disks with certain mystic governmental stamps upon them, 
or pieces of paper with certain written or printed marks 
upon them, but he is advancing to another to employ some 
part or allotment of the price-lowering control over the 
apportionment of all the tangible goods apportioned in the 
Market. He is not loaning a “saw” or a tool or some of 
the reproductive forces of nature. Hs is selecting out of 
the army of producers some little or great general who 
may cooperate with others in maintaining the price-deter¬ 
mined control. If the method, or “general,” selected is 
efficient there will be an increase in the tension of the price- 
determined control,—that is, credit efficiently used will 
“breed” credit. 

In the process of maintaining the price-lowering mo¬ 
nopoly, certain inferior methods are excluded by the fall 
IN PRICE. Those which remain are not all of equal effi¬ 
ciency, and many of these are excluded by the rise in 
WAGE. That is, an existing method, suffering from the fall 
IN PRICE and experiencing a decline in wage, will suffer a 
loss of credit, and thereby be excluded; although otherwise 
it could have survived for some time. It will not be able 
to obtain capital; it will not be able to obtain proper help, 
or to meet the advancing expenses required for labor, for 
advertising or other increasing costs of production. Or 
again, the man controlling this sort of a business may him¬ 
self reject his old method and learn the new and better way 
of conducting the business which the Rise in Wage of his 
rivals has forced upon him. 


100 


PUBLIC POLICY 


The process of exclusion first eliminates those who are 
rejected by the fall in price and the rise in wage. There 
remain a number of industrial factors of varying efficiency 
competing with each other. Their competition has two sides 
to it. In one phase of their relations they are rivals, for 
each of them struggles to seize as much as possible of the 
whole product or control over cooperation and none of them 
lower prices any more than by the amount which is suffi¬ 
cient, at the current level of prices, to exclude from any 
share in apportionment the least efficient factors. But, as 
their unwillingness to lower prices beyond a certain point 
limits their power to exclude, all those who can recover a 
profit at the current prices above their costs of production, 
participate and cooperate with each other in maintaining 
the price-lowering monopoly,—that is, they are really co¬ 
operating partners to a certain extent. The dead-line is 
the price-line,—all on one side of it cooperate at the instant 
any particular profit is made, but the oncoming of superior 
methods is constantly pushing the older or inferior methods 
towards the dead-line. Because the competing factors, 
while they are ‘ ‘ in the game, ’ ’ are to this extent co-partners 
and assist and benefit each other, there are certain gains 
and advantages to be had from being near to each other 
whereby the saving in time and in cost of material and 
repairs and other incidental expenses are available. As the 
productiveness of the excluding methods increases, the 
gains to be derived from this advantage of juxtaposition 
also increase. There are a limited number of the excluding 
uses or methods; that is, there are far more individual 
laborers than there are those who earn Indeterminate Wage 
or the Wages of Superintendence. These differ among 
themselves in productiveness far more than the individual 
laborers can differ. As out of these competing industries 


UNITED STATES IMPROVEMENT BONDS 


101 


there arises this struggle for the choice locations, the utility 
of the best locations will be the greatest to those who, by rea¬ 
son of their greater productiveness, are producing the great¬ 
est Fall in Price and Rise in Wage. Out of their greater 
Wage the superior producers or industries tender the price 
of exclusion from the choice locations. They tender no 
more than the price of exclusion, just as they lower price 
by the Fall in Price no more than enough to exclude by it. 
This payment is made out of Indeterminate Wage as a cost 
of production, that is, as a price-lowering and wage-raising 
cost of production. This expenditure is Rent, and it is not 
‘‘an element of price,’’ that is, it is not price-raising. Rent 
as an economic function is never paid, or never appears, 
except as the payment necessarily made to exclude inferior 
methods for the sole purpose of maintaining the price¬ 
lowering and wage-raising monopoly. To the one who 
pays it. Rent is merely a cost of production. But it is in 
its nature different from those costs of production made 
for material and for labor. First, it is the last, or final, 
payment made to exclude inferior methods, and thus deter¬ 
mines to a visible nicety just what the industrial tension 
is at that point. Prices of material and wages paid to 
labor do not have the publicity that Rent has. By the 
Fall in Price a certain value is made common; by the Rise 
in Wage a certain value is apportioned, or made private 
property. But by the Accrued Increment of Urban Sites 
a certain value is standardized, or made public as a pay¬ 
ment necessarily made to maintain the past exclusion of 
obsolete methods. For this reason it “piles up on the 
place,” as Quesnay said; it is not distributed by the nat¬ 
ural law which makes part of the value common in the Fall 
in Price and a part apportioned by the Rise in Wage. By 
the necessity of this payment the various competing meth- 


102 


PUBLIC POLICY 


ods are placed in the positions of symmetry determined by 
their relative productiveness with reference to the most 
productive factors, and by it a standard is maintained for 
all values and prices. Contrary to the position assigned to 
it in the Ricardian and Georgian scheme, Rent does not 
restrictively control the apportionment of the proceeds 
of labor, hut it standardizes all values hy measuring the 
exact tension of the price-lowering control, something that 
neither Price nor Wage can do. Secondly, Rent performs 
another commanding function which is analogous to the 
mysterious function of the heart, arteries and veins which 
perpetually maintain the circulation of the blood, and thus 
make possible the life of the highly organized, multicellular 
being. There is a mysterious pathological state of the body, 
culminating in the so-called “Black-Death,” in which all 
the blood runs out of the arteries into the veins. As the 
arteries are always fully distended with blood, while the 
veins are never, in health, more than one-third filled, it is 
possible for all the blood in the arteries, under certain 
unknown conditions, to flow into the veins and stay there, 
so that the victim will bleed to death without losing a drop 
of hlood. This function of Rent is the act which, by exact¬ 
ing the huge and increasing price-lowering payments by 
the most productive uses for the purpose of excluding infe¬ 
rior uses of urban sites, powerfully reacts along the con¬ 
verging channels of industry, where by the fall in price 
the products of labor are made to circulate until they reach 
the ultimate consumers. The whole arterial and venous 
system of Industry waits for this great heart-throb which 
generates and communicates powerful accelerating impulses 
to it. By this function Rent, although not controlling by 
inhibition, in the Georgian or Ricardian sense, the appor¬ 
tionment of all wealth, is yet the most potent single factor, 


UNITED STATES IMPEOVEMENT BONDS 


103 


other than the superior industrial functions, in stimulating 
the PALL in price, rise in wage and increase in the number 
and utility of the opportunities open to all. In and by 
this function industry is related to government, and it 
is through and by it that government will act when by 
the SINGLETAX it produces the maximum fall in price, 
RISE IN WAGE and RISE IN RENT. This characteristic of 
Rent, by which it is closely connected with the functions of 
GOVERNMENT, first appears in the established demarcation 
between the accrued increment and the accruing incre¬ 
ment, or the RISE in rent. The owner of the choice 
location, or the existing established use, must either con¬ 
tinue as before, in the progress of industrial methods, 
to make use of the site; or he must select out of a num¬ 
ber of competing uses the one to whom the use of the 
site will be assigned. In this he is like the capitalist who 
selects and rejects among the competing uses the ones 
to whom credit will be advanced. The landlord seeks to 
find the use which can with certainty pay the highest rent, 
and, among the price-lowering competitors this one will 
necessarily be the one which can distribute the greatest 
Fall in Price and appropriate the greatest Rise in Wage. 
But the capitalist is contributing an allotment of the price- 
determined control that has been apportioned to him by 
the Market and which is his own private property; the land¬ 
lord is dealing with a public form of property. The land¬ 
lord, by exercising the greatest intelligence and foresight in 
promoting the use of his sites, will greatly contribute to 
the Rise in Rent so that each increment of the increase as 
it rises may be said to be the result of the work of the 
landlord, and may be' claimed by him as his wage. But the 
landlord can not, and does not, sustain the value that rises; 
the increase in productive power of the competing factors 


104 


PUBLIC POLICY 


which maintains the firm substratum for the successive 
increments of the increase in Rent is due to the dissemina¬ 
tion of industrial improvements made common by the Fall 
in Price of past excluding methods. That is, the Rise in 
Bent is primarily sustained hy that which is made common 
by the Fall in Price. Hence if an attempt is made to 
appropriate both the Accrued and the Accruing Increment, 
by exacting a withholding charge for the use of all land, the 
Fall in Price will be checked and the Rise in Rent will be 
retarded and the landlord’s income as a promoter of the 
best uses of the sites will be diminished and the speed of 
advance of the oncoming superior methods which will ten¬ 
der the maximum Rise in Rent will be retarded. The land¬ 
lord has another partner, the government, as the supreme 
coordinating factor in maintaining industrial functional 
control, without whose assistance the landlord is of little 
use to himself or to the community. (See 9, 10 and 11.) 

(e) The Functional Control of Industry. —Thus we per¬ 
ceive that in the state of increasing returns, or any state 
outside of a perpetual panic, the producers of superior effi¬ 
ciency maintain the primary control over apportionment 

by THE PALL IN PRICE, RISE IN WAGE and RISE IN RENT. As 

Rent is always a price-lowering expenditure, the Rise in 
Rent is always accompanied by a Fall in Price, a Rise in 
Wage and an increase in the opportunities open to all. As 
all industries thus increase in their productive power and 
earnings, some of them exert more price-lowering, wage¬ 
raising and rent-paying power than others (for these are 
the Differential Factors), and we find that not only do they 
differ among themselves in their individual powers, but 
also in their functional powers. 

Functional differences are vastly greater than mere indi¬ 
vidual differences. It was because Rockefeller and Car- 



UNITED STATES IMPROVEMENT BONDS 


105 


negie applied themselves to the mastery of industries of the 
greatest functional importance that they have become kings 
and masters of men. Many other men with equal applica¬ 
tion and with equal personal ability have attained only 
moderate success because of the natural limitations of their 
chosen field of effort. Some industries, as a consequence 
of the results of their work, exert a control over the func¬ 
tion by which great groups of industries are conditioned, 
so that price-lowering efficiency in these particular con¬ 
trolling general functions is of enormously greater benefit 
to society than the others of less functional importance, and 
therefore the Market awards to the masters of the superior 
industrial functions its royal wage. Functional control is 
not personal; it is not negatively restrictive. It rules by a 
superior benefaction. In its primary form functional con¬ 
trol is exercised by the City as it rises in the midst of the 
agricultural plain and gathers into its trained army those 
who increase and multiply the efficiency of all the extract¬ 
ive processes. All industrial progress has a moral end, that 
is, it is purposive and seeks absolute dominion over nature. 
The Market does not reward toil or painful effort, as such, 
hut the work that increases general efficiency. In this way 
the Market displays an instinctive intelligence peculiar to 
itself and pursues an end far beyond the immediate pro¬ 
duction of the tangible goods. It guides by functional 
control the assembling industrial factors and shapes them 
into groups and separate industrial organs, just as the cells 
of the growing embryo come into the positions of symmetry 
which form the integrating centers for the future organs 
of the adult body. There is a Principle of Form in Civiliza¬ 
tion, manifesting itself in the industrial development as in 
other things, by which out of many factors pursuing their 
own individual ends and consciously purposing nothing 


106 


PUBLIC POLICY 


beyond that, are made unconsciously to serve a common 
purpose as they build up the body of the industrial Levia¬ 
than which will one day abolish Price and place in the 
hands of all men the final lordship and mastery over nature. 

(f) The Function of Defensive Price-Raising Privileges. 
—^While the several factors which employ their productive¬ 
ness alone control the apportionment of all the products of 
Labor by Price, that is, by the Fall in Price, they cannot 
meet by the Pall in Price that sort of rivalry which does 
not seek to overcome them by superior productiveness, but 
by restricting production. Those who restrict production 
necessarily decrease relatively the quantity of wealth pro¬ 
duced either by fraudulent appropriation, by force or by 
legal privilege. They compel payments to be made to them 
which are not “economic” or in any way necessary to pro¬ 
duction itself, and thus they interfere with the price-lower¬ 
ing control of the productive factors by raising prices, 
while the other can only control them hy lowering prices. 
It is therefore necessary that the excluding factors be sup¬ 
plemented in their price-lowering control by acts of govern¬ 
ment which alone can exercise the restraining power which 
excludes restrictive interferences with the price-lowering 
control. Government has from the beginning thus pre¬ 
vented or sought to prevent common robbery and similar 
crimes against “property” or industrial rights, and it has 
abolished slavery in many forms. In addition to these 
familiar acts of its ancient guardianship, modern govern¬ 
ments have also attempted to fence off industry from ex¬ 
ploitation by the invisible, mysterious and unclassified power, 
producing industrial “Black Death,” which constantly 
tends to impair the purchasing power of the Market and 
to protect and guard the Market from those periodical inter¬ 
ruptions of the state of increasing returns which we call 


UNITED STATES IMPEOVEMENT BONDS 


107 


“panics.” This protection government has attempted to 
give by the system of “Defensive Privileges” which act on 
the principle of a counter-irritant to purely Predatory 
Privilege. Defensive privileges may be likened to the horns 
or weapons of herbivorous animals by which they protect 
themselves from the camivorae, while the predatory privi¬ 
leges may be likened to the weapons of the camivorae. Both 
are fighting implements; but the one eats the thing he kills 
and the other does not. Defensive privileges are always 
attached to usefnl and necessary occupations of controlling 
functional importance, and by them the superior industrial 
functions are enabled to maintain their control over the 
price-lowering apportionment of the Market by draining 
the dependent industrial functions of the fund that other¬ 
wise purely predatory privileges would take away from 
them* They enable the superior industrial functions to 
maintain their functional control of the Market, and it has 
been found that they produce a relative pall in price even 
while they are actually raising prices. This is one of the 
mysteries of the protective system to which in some degree 
or other every business man in the United States is com¬ 
mitted. It is their experience that they can sell more goods 
when prices are rising than when they are falling. Hence, 
in 1896 the Democrats proposed to produce prosperity and 
rising prices by depreciating the value of the dollar; the 
Republicans by arbitrarily raising the prices of the prod¬ 
ucts of the industries of the greatest functional importance. 

* The chief examples of Defensive Privilege are the Protective 
Tariff and the Eailroad tolls. The Kailroads are capitalized far in 
excess of their original cost, but they cannot increase their volume of 
business unless they can raise their rates. This they have now dis¬ 
covered, and the demand for an increase in freight rates is based 
on the fact that a rise in these rates checks speculation in agricul¬ 
tural land and encourages the use Qt the land. Hence the increase in 
rates stimulates business. 


108 


PUBLIC POLICY 


The Republicans won, and the McKinley Tariff produced 
an immediate restoration of business prosperity. Later on, 
the discovery of new methods of smelting gold, which is as 
a metal given “free coinage,caused a greater depreciation 
in the value of the dollar than even “free and unlimited 
coinage of silver at 16 to 1’^ would have done, so that the 
benefit of the McKinley Tariff was largely neutralized; hut 
it was also found that the mere general raising of prices hy 
the depreciation of the value of the currency was not the 
road to prosperity. Prosperity comes from rising prices 
only when the Rise in Price protects and nourishes those 
controlling industrial functions on whose vigor and well¬ 
being all other industries are dependent. To effect this by 
the rise in price artificially produced by Defensive Privi¬ 
leges, the latter must always operate selectively upon the 
businesses of controlling functioiud importance so as to 
cause a stream of credit to set in towards them and in the 
opposite directio7i from the flow to purely Predatory Privi¬ 
lege from the depleted dependent functions. But the 
purely Predatory Privilege does not have to make anything 
or perform any industrial act whatever, and it exacts a 
tribute for permitting useful labor of any kind to employ 
itself,— its pressure is not exerted to exclude inferior uses 
for the piorpose of substituting superior uses, but it exerts 
its power to exclude all uses indiscriminately. Thus, indi¬ 
rectly the amount exacted by Defensive Privilege is taken 
away from Predatory Privilege, and not from the apparent 
victim, the “ consumer who pays an enhanced price for a 
product of the superior industrial functions. By robbing 
the intended victim of Predatory Privilege before the latter 
can get to him Defensive Privileges (when applied on a 
universal scale to the whole of the industries of a Nation) 
tend to produce a relative fall in the exactions of Predatory 


UNITED STATES IMPROVEMENT BONDS 


109 


Privilege, a relative Fall in Price and a relative and actual 
Rise in Wage, although they necessarily produce an actual 
rise in price, hut which is associated with a depreciation in 
the value of the unit of price, or the dollar.** But, on 
the contrary, the policy of the “Low Tariff,” or spurious 
“Free Trade” advocates, abolishes or weakens these defen¬ 
sive privileges and the controlling industrial functions are 
exposed to the depletion of their market by Predatory 
Privilege, so that the resulting actual Fall in Price is not 
followed by a rise, but by a Fall in Wage, showing that the 
apparent Fall in Price is relatively a Pise in Price and that 
the products of labor have become dearer and not cheaper, 
for it is always wage, or the price-determined control over 
apportionment, which measures all values. The laborer 
without a job or money is not benefited by low prices in a 
state of society where his unfortunate condition will always 
be produced by falling prices. On the other hand, the la¬ 
borer whose only experience with prosperity is that it is 
associated with rising prices will not object to them if an 
actual increase in the purchasing power of his wage comes 
with them. Price-raising privilege being absent, every Rise 
in Wage comes out of the Fall in Price. But the Rise in 
Wage thus produced is determined by the Superior Indus¬ 
trial Functions which control the excluding methods lower¬ 
ing price and apportioning wage. If the Rise in Wage is 
then drained from the dependent industrial functions by 
Price-Raising Privileges not attached to the Superior Indus¬ 
trial Functions, the latter wiU lose their market, and, of 
course, will not exert their functional control. Industrial 
depression will then ensue, financial dry rot and panics. 
If then Defensive Privileges are attached to the Superior 
Industrial Functions they will be able to appropriate by the 
Rise in Price thus produced what Predatory Privilege would 


110 


PUBLIC POLICY 


have taken. This will give a spurt of prosperity to the supe¬ 
rior and dependent industrial functions until the prosperity 
of the latter again exposes them to exploitation by Preda¬ 
tory Privilege as the increase in production—producing a 
relative Fall in Price—neutralizes the defensive check. 
Hence we have these periodic depressions and periodic 
spurts of prosperity. The defensive privileges must in¬ 
crease their tension to maintain their hold on their market as 
the market grows stronger,—otherwise improvident invest¬ 
ments of the incompetent and the useless rising value of 
agricultural, mineral and forest land will absorb the in¬ 
creasing purchasing power of the dependent industrial 
functions. 

Because the defensive privileges of the American Pro¬ 
tective Tariff System and the interlacing system of sim¬ 
ilar privileges which are associated with it are directly 
based upon the principle of functional relationship and 
control, they are to be sharply distinguished from the mere 
money-trapping restrictions of the primitive French Mer- 
chantilists, who by them destroyed the industries of France 
in the early days of Louis XIV. The great increase in trade 
and commerce resulting from the discovery of America 
and the route to India by way of the Cape of Good Hope 
produced a great demand for bookkeepers and accountants. 
To meet this demand the universities of the time instituted 
schools of bookkeeping and ‘‘business courses,’’ and the 
adepts of their immature speculations became the “Mer- 
chantilists. ” The accountant or auditor is always balancing 
his books; the monetary expressions of the history of the 
transactions he records naturally suggests to him that the 
object of all trade and commerce is to get possession of as 
many as possible of the current price-tokens which we call 
“money.” The mysterious immaterial reality, the price- 


UNITED STATES IMPEOVEMENT BONDS 


111 


lowering control over apportionment, which the money rep¬ 
resents and counts for us, was as unintelligible to these 
primitive accountants as, under somewhat similar condi¬ 
tions, ‘‘capital” is a mystery to the Ricardians. Business 
to the Merchantilists was the trapping of money; anything 
which would show a favorable balance looked good to them, 
and diversions which would produce this favorable balance 
were found to be possible by indiscriminate trade restric¬ 
tions. Kings, princes and governing bodies at this time, 
under the guidance of the “Merchantilists,” attempted all 
sorts of restrictions to keep the money that was in circula¬ 
tion from going out of the country. They trapped it by 
innumerable devices by which on all sides the life blood of 
commerce was tapped, sluiced and drained out of the nat- 
ural channels of industrial circulation until the industries 
of France were ruined and the Revolution was brought 
about. The ‘ ‘ Economists, ’ ^ or first expounders of the science 
of Political Economy, now called “Physiocrats,” saw the 
injustice of these trade restrictions and advocated absolute 
freedom of trade to be accomplished by the abolition of all 
trade restrictions. Neither the ‘ ‘ Economists ’ ’ nor the Ricar¬ 
dian “Free Traders” who came after them, however, 
grasped in any manner the principle of functional con¬ 
trol of dependent industries by the supreme industrial gen¬ 
erating functions as henry caret did, who founded the 
American School of Protection. Henry Carey’s system is 
not unlike the political economy of Oliver cromwell, who, 
by “The Shipping and Navigation Act,” forced the invest¬ 
ment of what would otherwise have been idle and useless 
capital in the building and navigation of ships, which for 
English industries was the supreme generating industrial 
function in his time, and thereby built up the industrial 
and imperial empire of Britain. In an analogous manner 


112 


PUBLIC POLICY 


BISMARCK, by his technical high schools, created modern 
industrial Germany. 

Thus we see that by attaching defensive price-raising 
privileges to the industries of the greatest functional im¬ 
portance a portion of the fund that would otherwise be 
absorbed in the unproductive and useless value of non- 
urban lands is made to turn the wheels of Industry be¬ 
fore it is lost. By these defensive price-raising privileges 
we hum the harn to roast the pig; but we do get some 
excellent roast pork in that way. Nevertheless, there is a 
better way. It is not necessary to employ these price-rais¬ 
ing restrictions. 

(g.) The Democratic Direct Tax Under the Constitution, 
—The Limited Single Tax. The Democratic party has al¬ 
ways been opposed to price-raising privileges, and has 
waged many a campaign against the High Tariff and other, 
forms of the defensive price-raising privileges with which 
the industries of the greatest functional importance har¬ 
ness themselves for war upon the poverty-producing en¬ 
emies of the Market. In their opposition to price-raising 
restrictions in the abstract, the Democrats and ‘‘Free 
Traders^’ of the Manchester School have been right; but, 
because they did not understand the effect of these par¬ 
ticular defensive privileges when attached only to the in¬ 
dustries of the greatest functional importance, they have 
been wrong in their practical judgments as to the conse¬ 
quences of such taxes. For the vast body of farmers, the 
excess of whose products must be sold at a price fixed 
abroad, the Tariff on farm products is, of course, of no 
benefit. But, nevertheless, the system which has developed 
the industries of cities has increased the purchasing power 
of the “Home Marketto the farmer and reduces the 
quantity which must be marketed abroad. 


UNITED STATES IMPROVEMENT BONDS II3 

As has been shown, the value of the non-urban land of 
the United States is due to two things: 

(1) The withholding from efficient use of nearly five acres of land 
for every acre that is efficiently tilled, and similarly of 5 mines for 
every one worked. 

(2) The vast increase in the efficiency of non-urban labor by the 
introduction of the implements and machinery—including transporta¬ 
tion improvements—invented and continuously manufactured by cities. 

Hence it is primarily the increase in productive power 
of the non-urban lands of the United States arising from 
the successful exploitations of the industries of cities which 
has made it possible for a selling value to attach to the 
non-urban lands in spite of the vast area which the rail¬ 
roads have made accessible. The defensive price-raising 
exactions of the superior industrial functions which Public 
Policy has permitted divert a portion of the rising wage 
of labor from unproductive investment in non-urban lands 
to these controlling functions, and the resulting better¬ 
ments increase the productiveness of non-urban labor. 
Hence by imposing this mild indirect tax upon non-urban 
land values it has been found that these values rise most 
rapidly. This fact gives to the Democrats an opportunity 
to steal from the Kepublicans the strong support of the 
great industrial interests without retracting or modifying 
their former hostility to indirect and price-raising Tariff 
charges. 

Experience has shown that Carey ^s system of Tariff 
Protection works. The people of the United States will 
never again follow a tilden or a Cleveland in a mere 
negative attack on the Tariff. The work of those great 
campaigns of the past will not be undone, and the verdict 
of the people as to the particular issue decided on the mere 
question of High vs. Low Tariff will stand. But if the 
Federal Government should impose a direct tax upon the 


114 


PtJBLiO I^OLICY 


land values of the nation, to be apportioned to the States 
according to their populations (as required by the Con¬ 
stitution), for such amounts as the deficiencies of the rev¬ 
enue derived from the present Tariff require, the Income 
Tax could be abandoned, and the tax proposed would 
actually increase the selling value of aU improved farms 
and urban property. Such a tax would not be great 
enough to break up the practice of withholding vast tracts 
of non-urban land from use, but it would compel weak 
or wholly unproductive holders to sell. The benefit to be 
derived would increase the value of other lands and affect 
the general condition of industry just the same as the 
tightening of the Tariff System would do. But it would 
not involve the waste and expense of the burden of indi¬ 
rect taxes. It would merely throw to the whale of our 
necessities enough of the “Jonahs’^ on board to placate 
the monster. 

Thus, although the unlimited singletax would destroy 
the selling value of all non-urban lands, the limited single¬ 
tax would increase that value. It would be shifted to the 
increased prosperity resulting from the prevention of the 
withholding of useful areas by weak or wholly unproduc¬ 
tive holders. Among the Speculative Differential Factors, 
the weak ones would be sacrificed as were the owners of 
the unimproved urban tracts by the increased cost of 
building when the McKinley prosperity set in. 

Hence, as the only sort of literature approximating to a 
“science^’ that we have which has ever attempted to define 
or set forth the necessary acts of government, by which 
government cooperates with the excluding and superior 
industrial factors in maintaining their functional control 
over apportionment, and which as a literature has set forth 
a program which has been incorporated in the Public Policy 


UNITED STATES IMPROVEMENT BONDS 


115 


of the United States, is that literature which has advo¬ 
cated the PROTECTIVE TARIFF. In SO far as we have any 
“Political Economy,^’ it is that. But it is exceedingly 
crude, and the reasoning of the industrial Taurus has not 
been of the highest order. But it has been the best there 
was. Political Economy, therefore, is the science of pro¬ 
tective TAXATION and other necessary forms of industrial 
PROTECTION. 

4. The System Of Defensive Privileges Now Maintain¬ 
ing The Industries Of The United States Is An Inchoate 
Form Of The Sin^letax. —The credit of the industries 
of the United States, the increase in purchasing power 
resulting from new inventions, is ultimately lost in the vast 
morass of the useless value of the agricultural, mining and 
forest lands,—that is, in the value of the non-urban lands. 
The system of Defensive Privileges protects industry be¬ 
cause it forces a portion of the credit or purchasing power 
(which otherwise would immediately be wasted in betting 
on this great national game) to travel a long and circuitous 
course in some sort of Useful Work in the superior or con¬ 
trolling industrial functions which, by the consequences 
they produce, exert a constructive price-lowering and wage¬ 
raising control over the apportionment of the products 
exchanged on the Market. After this diverted capital has 
been sluiced about this way it finally falls into the Morass, 
and hence the Tariff has to be raised from time to time. 
For no schedule can be fixed which will continue to pro¬ 
vide the same stimulus, unless the exactions of the Tariff 
are made to increase, it does not continue to protect. 

Let us suppose that the industries of supreme generating 
functional importance, commonly called “The Trusts,” or 
“The Interests,” were to have their way, and that Rocke¬ 
feller’s lieutenants were commissioned to run the country, 


116 


PUBLIC POLICY 


but compelled to continue to operate as they do now, only 
on a scale of greater freedom from interference by * ‘ Inter- 
State Commerce Laws^' and the threats of the Federal 
Courts. They would immediately raise freight rates and 
discriminate against both domestic and foreign competi¬ 
tion and thereby proceed to make the “Agricultural Imple¬ 
ment Trustsomething more than a “dream.’’ Inasmuch 
as the cities now are suffering both from the high price of 
food and from a general industrial depression (exclusive 
of “war industries”), the “Trusts” could not hope to 
increase their sales to the cities of any products controlled 
by them by raising prices to the cities generally. But the 
farmer is now getting $8.00 for beef on the hoof for which 
25 years ago he was lucky to get $4.00, and otherwise he 
has been so prosperous recently that the value of his land 
has nearly doubled. They would immediately raise the 
price of lumber, wire, binding twine and agricultural im¬ 
plements and make this advance in the price of these things 
to the agricultural interests universal throughout the whole 
country. This arbitrary advance would be directly taken 
out of the speculative or selling value of the agricultural 
land, so that in the first instance the value of the agricul¬ 
tural land would fall exactly and to the same extent as the 
price of the necessities to be purchased by the farmers went 
up. It would cost a man more to put a farm in working 
order than before, but it would cost him less to buy the 
land, and hence the “trust” would sell as many of its 
products at the new and higher price as it formerly did at 
the old or lower price. Finding that it would be possible 
to “gouge” this market, the “trusts” would raise prices 
on the farmer again with the same result: they would sell 
just as much as before. But, having diverted in this man¬ 
ner certain capital otherwise available to buy land, the 


UNITED STATES IMPROVEMENT BONDS 


117 


price of the land would fall just that much. Possessed of 
ample power, and with a consciousness of absolute security, 
the “Trusts’^ would mine deeply into this rich vein, with 
the inevitable result that, as they diverted more and more 
of the capital which otherwise would have bought land, the 
value of agricultural land would be steadily forced down. 
As there are five acres of fertile land for every acre of land 
that is effectively cultivated, when once the value of this 
enormous area of land began to fall, and it was universally 
recognized that no power could stop the exaction of the 
Trusts,’’ a “panic” in agricultural land values would 
ensue. The unused agricultural areas of fertile and wholly 
unimproved land amounting to 871,000,000 acres, an area 
24 times the size of the State of Illinois, are held out of use 
solely because it is believed their value is rising. And by 
holding them out of use, the improvements which increase 
the productiveness of agricultural labor and which bring 
remote lands nearer to the Market, cause the lands to be¬ 
come more valuable. But this value (resulting solely from 
a purely predatory price-raising privilege of withholding 
untaxed land from use), being preyed upon and in the 
process of destruction by a more powerful monopoly, would 
collapse like the bubble that it is. If it was generally under¬ 
stood that the value of agricultural land was declining and 
would every year be less by reason of the increased exaction 
of the “Trusts,” every holder and owner of unused agri¬ 
cultural land would hurry to sell and dispose of all land 
which he could not use. Thus the 871,000,000 acres of 
wholly unimproved and unused fertile agricultural land 
would be thrown on the Market to be disposed of immedi¬ 
ately for what they would bring. This would mean that 
the selling, rental and taxable value of agricultural lands 
would wholly disappear from all except a very small portion 


118 


PUBLIC POLICY 


which would be able to command a diminishing rent for 
a limited period. 

During this process the “Trusts” would be pumping 
the value out of the agricultural lands; as soon as the gen¬ 
eral nature of the pressure became known to the public, 
the value of the land would go down faster than the arbi¬ 
trary exactions of the “Trusts” forced up the price of its 
products. During this process the purchasing power of the 
agricultural industry as a market for the products of the 
“Trust” would increase with every advance in the price 
of the products of the “Trust” by the exact amount that 
the speculative fall in price of these lands exceeded the 
exactions of the ‘ ‘ Trust. ’ ’ But when the price of the land 
had fallen to zero, then every future successive advance in 
the price of the products of the “Trusts” would be fol¬ 
lowed by diminished sales and profits. Here then is the 
goal of all defemive privileges; the defensive privileges 
employed by the Trusts^ ^ wage war upon the fictitious 
value which the withholding of agricultural land from use 
coAises to attach to it, and therefore are inchoate forms of 
the SINGLETAX. When they have arrived at that goal they 
must be supplanted by the singletax in order to continue 
the process of protecting industry. 

5. With The Vast Increase In Value And Stability Of 
The Securities Of The Industries Of Controlling Functional 
Importance Agricultural Land Values Would In Time 
Disappear. —There must inevitably come a time when the 
capital or purchasing power now uselessly attaching to the 
titles to agricultural land will be elsewhere employed and 
the farmer will till fertile but valueless acres. The money 
that is invested in agricultural land can bring no other 
return to the owner than whatever rental and increase in 
value the land commands. There is more fertile land 


UNITED STATES IMPKOVEMENT BONDS 


119 


within the boundaries of continental United States than 
the agricultural industry will ever be able to wholly utilize 
in tillage, and the improvements in method which accom¬ 
pany an increasing investment of capital will reduce the 
proportion of the used to the unused area. Thus at the pres¬ 
ent time the area that is improved and cultivated (taking 
the report of 1909) of the tillable land is 479,000,000 acres, 
an area equal to the area of 13 states of the size of Illinois. 
But, according to the 1909 Report of the Department of 
Agriculture, the crop raised on that land was about one- 
half of that which would have been produced by farmers 
of average^’ efficiency, according to the expression used 
in the Report. If, therefore, these farmers could be taught 
how to farm and were supplied with sufficient capital to 
equip their farms adequately, the area cultivated would be 
diminished, perhaps by one-third, while the yield would be 
doubled. Whatever tends to increase the efficiency of agri¬ 
cultural labor tends to increase the available area by reduc¬ 
ing the area required to be used. This would not of itself 
reduce the selling or rental value of the land, but it is some¬ 
thing to be remembered. But as more secure and remu¬ 
nerative forms of investment are made accessible to all, the 
fund that will be available for investment in these lands 
will diminish,— the market for these lands will fall off as 
the savings of the people hecome more and more invested 
in the bonds and stocks of the great ind^istrial enterprises 
of the controlling functional importance, and less and less 
in agricultural land as a speculative investment. If you 
want to sell a piece of land you must have an abstract; this 
title must be examined and much delay occurs. At the same 
time there is no immediate market for most of the land; 
unless you catch a buyer in the immediate mood for buying 
you will have to sell the land always at a sacrifice. There 


120 


PUBLIC POLICY 


is no current market, no daily quotation on the price of 
land. Its value also has a mere local reputation, and the 
securities evidenced by land-titles have no generally ac¬ 
cepted and ascertained market value. This is not the case 
with the listed stocks and bonds of the great corporations. 
So long as the values of these corporate securities are fluctu¬ 
ating and uncertain; so long as their market values are 
juggled with by speculators influencial enough to affect 
them; and, perhaps, so long as the great multitude of 
“pikers” are permitted to gamble their savings on “mar¬ 
gins,” it will be impossible to drain the vast morass of 
agricultural land values of their contained $40,000,000,000 
other than by the rising pressure of the Defensive Privilege 
of the “Trusts” or by the singletax. But the immense 
increase in the power of the financial magnates has brought 
to them an increase of responsibility; none of the great 
financial powers of today would dare to play havoc with 
the Market as the early ones did. It is to their 
interest to maintain business prosperity and the stability 
of all credits and values, and to give to their best 
securities an ever increasing stability of value. There 
is now about $20,000,000,000 invested in the better class 
of these securities which are almost always convertible 
into cash in any market of the country; securities which 
pay a better return on the money than investment in agri¬ 
cultural land, and which are practically untaxed except 
as their owners are reached by the Income Tax. This fund 
is growing faster than the value of the agricultural land; 
it develops with great rapidity with any general spurt in 
industrial prosperity. With the stabilization in the mini¬ 
mum value of these securities their substantial increase in 
value will greatly exceed any possible increase in the value 
of agricultural lands. As a speculative investment they 


UNITED STATES IMPEOVEMENT BONDS 


121 


will command more and more of the capital now invested 
or seeking investment in these lands by way of purchase 
or mortgage. As this fund increases to such proportions 
that it is able to employ more and more of the capital now 
‘‘investedor staked’^ on the estimated rise in the value 
of agricultural lands, the amount of capital seeking the 
chance to bet on the rise in the price of these lands will 
fall off fast enough to begin to produce a gradual fall in 
their value. When this fall in value once sets in and be¬ 
comes universal, and is recognized to be such, speculation 
will destroy the value of these lands. That value is only 
maintained by the universal knowledge of the fact that it 
is rising as a consequence of increasing returns and the 
withholding of idle land; it has no real or necessary exist¬ 
ence, and is only a bubble. 

6. The Value Of Urban Lots Is A Real And Necessary 
Economic Value Resulting From The Substitution Of 
Superior For Inferior Uses.—^While the value of agricul¬ 
tural land arises from the accident that five-sixths of it is 
withheld from efficient use, and that by this restriction in 
the state of increasing returns a price-raising monopoly 
gives a value to it, such is not the case with city lots. The 
value of the city lot arises wholly from the substitution of 
uses. The superior methods which maintain their control 
of the apportionment or pricing of goods in the Market, do 
so by excluding inferior or obsolete producers from the 
Market by the fall in price, the rise in wage and the 
RISE IN RENT. The excluding methods, seeking the maxi¬ 
mum Wage which is the control of the apportionment hy 
Price of all the tangible goods exchanged on the Market, 
voluntarily and out of their superior power of productive¬ 
ness, lower Price just enough to exclude those methods 
which, by their exclusion, will give to them the maximum 


122 


PUBLIC POLICY 


Wage, In like manner the exqluding methods, seeking the 
savings in time and other advantages of position, tender 
for the use of the choice locations merely enough to exclude 
the inferior competing use. They do not tender any more 
than enough, and what they tender they offer for the pur¬ 
pose of profiting by the payment itself. The blacksmith 
can employ the farmer’s cabbage garden much more 
efficiently than the farmer can, if the site is suitable to the 
uses of his shop. The amount that he would pay to the 
farmer would, in the first step in the formation of a village, 
be determined by the value of the lot to the farmer and no 
more would have to be paid than enough to induce the 
other to profit by the trade. In time other uses in like 
manner exclude the blacksmith as the village grows into a 
city. In the city are a limited number of uses of high 
efficiency; for the city itself there are an infinite number 
of lots since the continent extends on all sides around it. 
But the number of uses which will profit by paying some¬ 
thing to exclude an existing use is limited and beyond the 
margin where the competition of such uses extends urban 
values cannot go. If the superior method did not exclude 
the inferior method the farmer would still be raising cab¬ 
bages in the heart of the city, and the citizens both of the 
city and elsewhere would be deprived of the benefits to be 
obtained by them from the fall in price and the rise in 
WAGE derived from the superior methods which would give 
them cheaper goods and more and better opportunities for 
employment. The payment which excludes inferior methods 
from choice locations is a price-lowering and wage-produc¬ 
ing necessity, and the exaction of that payment for the use 
of choice locations is a necessary industrial judicial act. 
The rent of urban lots is a necessary phenomenon of price¬ 
lowering monopoly and therefore is a real and not a ficti- 


UNITED STATES IMPROVEMENT BONDS 


123 


tious value as all price-raising monopoly values are. The 
value of urban lots, or urban rent taken as a whole, will 
necessarily rise with the increase in the productive efficiency 
of the competing factors; that is, from the pall in price 
proceeds the rise in wage and from the fall in price and 
THE RISE IN wage together comes the rise in rent. Only 
that payment for the use of land which is made to substi¬ 
tute a superior use for an inferior one; which substitutes 
business which produce goods and sell them cheaper and 
which pay better wage, is rent. Rent of this sort attaches 
only to urban land, only in rare and exceptional conditions 
of a temporary character can it ever attach to agricultural 
land. It is a payment which rises with the Rise in Wage 
and out of the Rise in Wage, and it is a payment that is a 
prerequisite to the further Rise in Wage and cheapening 
of the price of goods resulting from increased productive¬ 
ness. By it INDUSTRY holds what it has gained. Whatever 
increases the productiveness of labor, lowering prices and 
raising wages, will always necessarily raise the value of 
urban lots as the expenditure made by superior methods to 
exclude inferior methods increases. The property, there¬ 
fore, that the owner of an urban lot has in the value of that 
lot is entirely different in character from the property 
which the owner of agricultural land has in the value of 
that land. These landlords have conflicting interests, for 
it is to the interest of the owner of the urban lot to destroy 
the value of the agricultural land. It is to his interest as 
a landlord of an urban site that the $40,000,000,000 now 
uselessly “ staked on the probable rise in value of the agri¬ 
cultural lands, and that the additional $10,000,000,000 simi¬ 
larly ‘‘staked’^ on the rise in value of the mineral and forest 
lands, should be released from its useless captivity and put 
into active production and circulation so as to immediately 


124 


PUBLIC POLICY 


^^boom’' the value of all city lots. The urban landlords, 
at present, have no class-consciousness; they do not perceive 
how utterly their interests conflict with the interests of 
those who are withholding the vast fund of unemployed 
capital and the vast areas of unused land from use. But 
they will find out in time. Already it is estimated that the 
value of the urban lots, on which are housed and employed 
over 53% of the population, are worth more as cleared sites 
than all the agricultural, mineral and forest land in the 
country,—that is, the value of the urban lots is now over 
$50,000,000,000. If the whole of the idle capital now an¬ 
chored in the value of the agricultural, mineral and forest 
land of the United States were released from the docks 
where it “rots on Lethe’s wharf,” it would come, a full- 
bellied argosy, rich with the wealth of time, into the Market 
and be converted from being a debt into being an asset,— 
that is, the working capital of the United States would be 
increased by the addition to the $10,000,000,000 employed 
in 1910 by the sum of one hundred billion dollars. This 
would produce some striking effects on the values of the 
lots used for business and residence purposes in cities. 

7. Ground Rent, Or The Value of Urban Lots, Is Di¬ 
visible Into Two Funds, Viz., The Accrued Sum Of All 
Past Increments And The Accruing Increment. —No other 
land has a permanent, necessary and growing value other 
than urban lots, for no other payment for the use of land 
is one made necessary to maintain the price-lowering 
monopoly which is the Market. If the necessity for defen¬ 
sive privileges were abolished, the great industries which 
mine or deforest the country would distribute in cheaper 
products the advantages of the place. Rent can only be 
required where there is competition for the use of the site, 
and cannot attach to sites for which all competition is ex- 


UNITED STATES IMPEOVEMENT BONDS 125 

eluded by the Fall in Price. Rent cannot attach to the 
agricultural lands except by excluding the greater part of 
them from any efficient use; but where the most efficient 
uses which have already excluded all competition by the 
Pall in Price are in possession of mineral land, or other 
sites employed by them, rent will not attach to the spaces 
so employed. That is, the agricultural lands lie below the 
margin of competitive efficiency which exacts rent; the func¬ 
tional uses of their lands by the industries of the very 
highest efficiency and functional importance lie above it. 
If the “Coal Trust,as a pure price-lowering monopoly 
was producing coal cheaper than anyone else could do if the 
land was to be had for nothing, the mine itself would be 
worthless. Absurd as it may seem, it is daily brought to our 
attention in various ways that rent is an obligation which 
the industries of the greatest functional importance are 
even now in many ways able in large part to escape from. 
In time they will be able, when they have excluded all com¬ 
petition, to escape from it altogether. The most productive 
of all labor is necessarily that of transportation which is 
primarily carried on on the common roads and the streets 
and alleys of cities. So important is it to industry that 
land used for this purpose be free, that from the beginning 
of time this sort of land has been retained in common use, 
for all values would be destroyed if the free use of such 
land was not required. Rent, therefore, as a phenomenon 
of the competition of industries not of supreme functional 
control seeking the use of urban lands, is the only sort of 
rent which Political Economy, as a science of the necessary 
expenditures of industry, knows of. 

The rent of urban lands rises with the successive incre¬ 
ments of the RISE IN RENT as the competing methods, exclud¬ 
ing inferior methods by the fall in price, rise in wage 


126 


PUBLIC POLICY 


and RISE IN RENT increase in efSciency. The superior com¬ 
peting methods bear three kinds of fruit on their branches, 

viz., THE FALL IN PRICE, RISE IN WAGE and THE RISE IN RENT. 

These are borne simultaneously. If we ignore for the time 
being the irregular and somewhat spasmodic advance and 
recession of value in these lots, but taking the result at¬ 
tained after many years in which substantial progress is 
made, we shall find that in spite of the irregularities noted 
the lot has all the time possessed a certain increasing value 
from which it has not receded, and this value may be called 
its Accrued Value^^ or ^^The Sum of all Past-Accrued 
Increments,*^ At any one time, so irregular and spasmodic 
are the fluctuations actually recorded in the state of mini¬ 
mum interrupted increasing returns, it would have been 
difficult or impossible to determine with precision where 
to draw the line separating the Accrued** from the 
Accruing Value.** As in a growing tree the line of demar¬ 
cation is clearly shown which separates the green and grow¬ 
ing wood full of purpose and sap, from the dry, standard¬ 
ized product of past seasons, so in the state of uninterrupted 
and constantly increasing returns the distinction between 
the “Accrued^’ and the ‘‘Accruing Increment’’ could 
always be determined. This line divides between that part 
of Ground Rent which is Public Property and that part 
which is Private Property, or Wage. For the landlord, as 
a promoter of the best uses of the site serves himself and the 
community at the same time. By selecting as the tenant 
of the site that competing use which can, with certainty, 
pay the most rent, he looks out directly for himself. But 
at the same time he contributes towards the lowering of 
prices and the raising of wages, for the Rise in Rent comes 
out of the Rise in Wage (or Indeterminate Profit) which 
the superior method commands by its Fall in Price. If the 


UNITED STATES IMPROVEMENT BONDS 


127 


best sites were not taken by the methods which paid the 
most rent because out of their greater Fall in Price they 
commanded a greater Wage, inferior uses would have them 
and the community would not get its share of the Rise in 
Wage or of the Fall in Price. Hence the “Accruing Incre¬ 
ment^^ is not, as J. S. Mill taught, “unearned;’’ it is the 
only part of Ground Rent which is rightfully “wage” or 
private property. But the Sum of All Past Increments, 
or the Accrued Rent, is made up of increments which in 
the past have been similarly earned while they were for 
the first time accruing but which afterwards blended into a 
common fund, the Product Net, or Sum Total of All Past 
Accrued Increments. This is the sum that industry offers 
to GOVERNMENT in Compensation for its services to industry. 
By the appropriation of this by the taxing power the State 
not only relieves industry of the oppression of all forms of 
predatory privilege, and of the necessity of employing 
defensive price-raising privileges, but thereby also throws 
open to all equality of common access to the natural 
bounties, maintains the circulation of capital in all pro¬ 
ductive employments, secures an absolutely stable unit of 
valuation, and finally enriches the owners of the lands from 
whom it collects that Accrued Increment by forcing to the 
uttermost the growth of the “Accruing Increment.” In 
the state of minimum, interrupted increasing returns the 
boundary between these two funds is obscure and undefined, 
but this obscurity ceases the moment the interruptions 
cease and a state of constancy in increasing returns is estab¬ 
lished. The enforcement by the State of the collection of 
the Accrued Increment brings on immediately the state of 
maximum increasing returns and the boundary between 
these two funds becomes clearly defined, and the Accruing 
Increment rises with the maximum rapidity. 


128 


PUBLIC POLICY 


8. The Accruing Increment Of The Price-Lowering 
Ground Rent Of Urban Lots Blends With The Accrued 
Increment As New Improvements In Method, Out Of 
Whose Wage The Accruing Increment Was Paid, Come 
Into General Use. —The new methods, while yet they are 
superior, are able to exert an excluding command over the 
apportionment of all products coming into the Market and, 
by sharing in the spoliation of the incompetent as well as 
in the gains of those functionally dependent upon them, 
to earn a superior Wage out of which they pay their rent. 
But after a while these new methods, or the advantages to 
be obtained from them, will have come into general use and 
the former excluding methods having been superseded by 
new improvements, an increased efficiency is communicated 
to the minor competing factors. Then the old rent no longer 
is sufficient to exclude the competing uses, and the former 
“Accruing Rent’^ blends with the “Accrued Rent’^ as a 
definite and certain value to be distinguished from the 
speculative value attaching to the highest possible present 
use of the lot. There is a certain seasonal periodicity about 
this advance of “Accrued Rent” corresponding to the 
“rings of growth” of a tree. These periods within which 
it is possible to determine with certainty the actual sub¬ 
stantial advance of the “Accrued Increment” are impor¬ 
tant. For the purposes of this argument I shall assume 
that they are ten-year periods, and shall call the interven¬ 
ing period of ten years elapsing between one possible valu¬ 
ation or assessment and another the Decennial Period of 
Assessment.^ ^ 

9. The Maximum Selling Value Of Land Is The Capi¬ 
talization Of The Accruing Increment. —In the state of 
interrupted minimum increasing returns—the condition 
which exists—the value of an urban lot is the capitalization 


UNITED STATES IMPKOVEMENT BONDS 


129 


at the current rate of interest of its present and prospective 
ground rent. What the lot will now rent for, however, has 
little to do with fixing its value if there is any strong reason 
to think that a greater or lesser rent could be had in the 
near future. In any healthy state of business all urban lots 
have a strong “speculative’’ value apart from that value 
which has accrued and is certain. If the state of increasing 
returns can be made steady, constant and certain, with no 
downward movements, the value of the lot would always 
be the capitalization of the Accruing Increment, not the 
capitalization of the Accrued Increment. 

10. The Stabilization Of The Accrued Increment Is The 
First Step Necessary To Produce The Maximum Increase 
In The Accruing Increment. —So long as the main body 
of superior methods can, in all the various employments of 
INDUSTRY, maintain their price-lowering control of the 
apportionment of all the products coming into the Market 
by the exclusion of inferior methods by the pall in price, 
RISE IN WAGE and RISE IN RENT, there will at least be a con¬ 
dition of minimum increasing returns. Where there is a 
universal rise in rent, however slight, the Accrued Incre¬ 
ment remains stabilized with no downward fiuctuations. As 
the Accrued Increment is the foundation upon which the 
Rise in Rent rests, it is evident that the statement embodied 
in the caption of this paragraph is true. Not only is it 
necessary that the Accrued Increment should remain stable 
for the MAXIMUM rise in rent, but it must remain stable for 
any rise in rent. The problem, therefore, of securing the 
maximum selling value to city lots is the problem of stabil¬ 
izing the Accrued Increment. 

11. The Accrued Increment Can Only Be Stabilized 
By Appropriating It By the Singletax —The singletax 
is that necessary act by which government at the same 


130 


PUBLIC POLICY 


time by one act maintains itself and maintains the 
functional subordination of industrial acts to each other in 
the order of their price-lowering control over apportion¬ 
ment. Government maintains by this act the functional 
subordination of competing industries by abolishing all 
price-raising taxes and charges for which it is now directly 
and indirectly responsible, and by collecting as its rightful 
Wage from the landlord, as the factor cooperating with it, 
that part of his Gross Rent which has been stabilized by 
the past exclusion of uses. This payment is made by the 
landlord as a promoter of the best uses of sites as a price¬ 
lowering cost of production made by him for the purpose 
of collecting the maximum Rise in Rent necessarily result¬ 
ing therefrom. By the singletax the Accrued Increment 
is appropriated and no more. This tax, falling on the value 
of all lands, will immediately explode the bubble of the ficti¬ 
tious, price-raising monopoly value of agricultural, mineral, 
and forest lands and destroy that value. Upon the levy of 
THE SINGLETAX $50,000,000,000 worth of value now attach¬ 
ing to the titles to agricultural, mineral, and forest land 
would be separated from them, and if not otherwise pre¬ 
served, it would be destroyed or confiscated. Agricultural, 
mineral, and forest land would rent for nothing, sell for 
nothing, and, of course, could not be taxed. There would 
remain only that land value which was economic because it 
was to the interest of all of the industrial factors that it 
should be paid, as much to the interest of the one who pays 
it as to the interest of the one who receives it. But he who 
pays the Accrued Increment will pay it because he thereby 
obtains the right to appropriate the Accruing Increment, 
while GOVERNMENT in collecting the Accrued Increment will 
stabilize it and compel the most rapid advance of the Accru¬ 
ing Increment. Unless the Accrued Increment is appropri- 


UNITED STATES IMPEOVEMENT BONDS 


131 


ated by taxation the unused agricultural, mineral, and 
forest lands cannot be forced into use, and the title-owners 
will continue to trap the vast increasing fund of unused 
capital and perpetually drain the Market of its purchasing 
power. By the singletax all forms of Defensive Privileges 
are made unnecessary, the burdensome charges of all price¬ 
raising restrictions and taxes, multiplying enormously the 
costs of production, are abolished, and the vast amount of 
unused capital now trapped in the value of the agricultural, 
mineral, and forest lands is released for productive use, and 
this capital coming into the Market will force upwards 
immediately the maximum rise in the Accruing Increment. 
For by this will be established the condition of constant, 
maximum increasing returns by which the Accrued Incre¬ 
ment will be stabilized. And it will be impossible to sta¬ 
bilize the Accrued Increment without producing the maxi¬ 
mum Rise in Rent. 

12. The Accrued Increment Of Urban Ground Rent 
Constitutes The Only Natural And Possible Standard Of 
Valuation Determining The Number And The Value Of 
The Monetary Price Units. —Value, the control maintained 
by the fall in price and rise in wage is standardized only 
by Ground Rent. As the Rise in Wage proceeds from the 
Fall in Price and the Rise in Rent from both, it is evident 

that THE SUM OF ALL PAST ACCRUED INCREMENTS OF GROUND 
RENT is a standardized value (control over apportionment) 
representing the exclusion of all ancient uses and the value 
or profit resulting to the community from their exclusion. 
As from the pioneer days there came in a stream of im¬ 
provements and betterments which lowered prices and 
raised wages, they registered, in the rising price demanded 
to exclude from choice locations, the exact measurement of 
the relative value of these betterments and the Rise in Rent 


132 


PUBLIC POLICY 


contains in solution the history of all past betterments. 
Economists often speak of the “price-level/’ but the value 
of all current articles of exchange fluctuates on the Market. 
There is only one unit that is stable, and that is the unit 
of the value of the Sum-of-All-Past-Accrued-Increments-of~ 
Ground-Bent-of-TJrhan-Lots in the State of uninterrupted 
increasing returns. No matter what the value of an article 
or commodity may be at the time the total value of the 
Accrued Increment is computed to be in the terms of the 
value of that commodity, that unit, when once determined 
in that manner, will not afterwards fluctuate if the ‘ ‘ Sum ’ ’ 
is itself stabilized. Thus, if, in the state of uninterrupted 
increasing returns under the singletax, the total value of 
Urban Ground Rent less the present speculative or accruing 
value were computed in the terms of our present dollars, 
which are gold dollars, and a legal tender paper money in 
nominal value equal to the total sum of the Accrued Rent 
issued and expended by Government as it collected or appro¬ 
priated the Accrued Rent by the singletax, the value of 
Miese paper dollars would always remain of the present 
value of the gold dollar even if the value of gold should 
entirely disappear. Every one of these paper dollars would 
be a draft on a deflnite aliquot part of Accrued Rent and 
be redeemable therein, so that as the rent increased the 
increase would be computed in the same units. As the pay¬ 
ment of Accrued Rent is that stabilizing payment which 
maintains the exclusion of all competing obsolescent and 
obsolete methods by which prices are flxed and flxed wage 
and profits determined, they are the only possible units 
of price which could not depreciate if the Accrued Rent 
were made stable by the state of uninterrupted increasing 
returns and would not increase in value as the increasing 
volume of Ground Rent was computed in these units. 


UNITED STATES IMPROVEMENT BONDS 


133 


13. No Nation Can Maintain At Par A Greater Volume 
Of Money Of Ultimate Redemption Than The Sum Total 
Of Accrued Urban Ground Rents. —It matters not what 
may be used in any country as the units of Price, or as 
money, whether gold, silver, copper, paper or clam shells, 
there can be no more of it maintained on a parity with the 
price level than the total of the Accrued Urban Ground 
Rents of the nation. The “Unit of Price” is an aliquot 
part of Accrued Urban Ground Rent. If, by reason of new 
processes, more gold or silver dollars or nominal “Units of 
Price ’ ’ are minted and issued as legal tender than the total 
sum at some ratio of Accrued Urban Ground Rent amounts 
to, then the prices of commodities will rise and the value 
of the coins decline until they reach the value which is the 
total value of Accrued Urban Ground Rent. The total 
nominal value of the legal tender money issued by the 
United States is somewhat in excess of the total Accrued 
Urban Ground Rent of the nation, and therefore the value 
of the dollar continues to decline as the increase in the 
volume of money exceeding the rate of increase of Accrued 
Urban Ground Rent continues to diminish the value of the 
unit as an aliquot part of Accrued Urban Ground Rent. 
The Standard of Value itself is never the money metal, 
whatever the value of the money-metal may be in the mar¬ 
kets of the world, but is always this Accrued Urban Ground 
Rent—the standardized price of maintaining the price¬ 
lowering monopoly as determined by Urban Ground Bent; 
for it is Urban Ground Rent, and not price or wage, which 
measures by recording the actual extent of industrial 
progress and thereby is the Standard of Valuation. 

14. The Unit Of Accrued Urban Ground Rent Is There¬ 
fore The Natural Unit Of Valuation. —Without such a unit 
a monetary system is always upon an artificial and unstable 


134 


PUBLIC POLICY 


basis. As a result of the great European war (for which 
the parrots, repeating Ricardian fallacies in the colleges 
of the world are chiefly responsible) the hoarded treasures 
of gold of the belligerent nations are being “ dumped ” upon 
the neutral nations for the purchase of supplies. It was 
recently reported that the Swedes had wisely concluded to 
decline to receive any more payments in gold, fearing that 
as a consequence of the war gold might be demonitized alto¬ 
gether by some or all of the belligerent nations, and that 
then they would have on their hands a commodity of uncer¬ 
tain value. This danger is very real, for the war will con¬ 
tinue until by exhaustion each of the nations will be obliged 
to face nature’s literal facts and to dispense with all aca¬ 
demic shams and politic Actions. It is not at all necessary 
for a great nation to bow to the fetich of gold. 

15. The Singletax Is The Only Method Of Taxa¬ 
tion Which Is In Accord At The Same Time With 
The Precepts Of The Gospel And With Business Policy. 
—The singletax is the system of taxation which would be 
adopted by the most enlightened Public Policy and it is the 
system to which the industrial organization of the United 
States is tending. The two party organs representing the 
character and intelligence common to all have always his¬ 
torically played the parts of the two brothers mentioned in 
the New Testament somewhere: A certain man had two 
sons, and, laying his commands upon them at his deathbed, 
one of them promised to obey their father and the other 
refused. But the one who promised to obey did not do so, 
and the one who refused to obey these commands kept them. 
Which of these, said Jesus Christ, obeyed the commands of 
his father? In the case before us one of these parties has 
at every national convention since Jefferson founded it 
solemnly renewed its promise to maintain the guarantees of 


UNITED STATES IMPROVEMENT BONDS 


135 


the Constitution and its continued opposition to special 
privilege in all forms, and it has done nothing whatever to 
carry out these promises; hut, on the contrary, the other 
party has continuously sought the favor of the rich and 
powerful and has conferred favors upon them, hut has 
strenuously maintained against the opposition of the other 
party the system of Defensive Privileges which, being in 
the nature of an inchoate singletax, has accomplished what¬ 
ever has heen done to fulfil and carry out in the economic 
order the high commands enjoined upon us hy the founders 
of this nation. But Hamilton’s party is not to he much 
praised for what greed alone prompted it to do, nor is 
Jefferson’s party to he much hlamed for following the de¬ 
ceiving counsel of the college professors. 

The sayings of Jesus Christ with reference to certain 
problems of government and taxation disclose this system 
as existing in his mind. Among the heathen those who rule 
lord it over them, hut, among you, he said, let it he not so. 
For the ruler should be the servant of many. In other 
words, in the very act of collecting its revenue the State 
should serve, and protect its wards hy the very act hy which 
it maintains its revenues. It will neither rob nor permit 
others to rob, so as to be directly or indirectly the source 
of oppression by its acts. The coin bearing Caesar’s Image 
belongs to the State; to Caesar must be rendered that which 
is Caesar’s. But what is it that is Caesar’s? ^^Now when 
they were come to Capernaum,^^ Matthew says, ^Hhey who 
collected the (poll-tax of) twenty-five-cents-each came to 
Peter and said: Doth not your master pay tribute? And 
Peter said: I will see. And Jesus said to him: Tell me, 
Peter, of whom do the kings of the earth exact tribute f Of 
their own children, or of strangers? And Peter said: Of 
strangers. Then, said Jesus, are the children free. Butf 


136 


PUBLIC POLICY 


lest we should he misunderstood^ go thou to the Sea and take 
a Hooky and the Fish-That-First~Cometh-Upy that take; and 
when thou hast examined its Mouth thou shalt find in it 
Fifty Cents. Take that and pay for me and for thee.^^ 
Here the thought involved in the former saying is fully 
contained and symbolized. For in any just government all 
the people would be ‘‘children;’^ none would be ‘‘stran¬ 
gers” or foreigners to the equal favor of the sovereign. 
Hence, in the just government the people would not be com¬ 
pelled to pay that which is in the nature of a “tril)ute” 
levied upon them by those who “lord it” over them and 
plunder them as the kings did of the “strangers” to their 
favor. But if this sort of tribute paying is abolished, how 
is GOVERNMENT, the just onc, to be sustained ? We shah cer¬ 
tainly be misunderstood if we say that all taxes should be 
abolished I The answer that is given tells us that the single¬ 
tax is the tax which is no tax! In the great Sea of Oppor¬ 
tunity swim many industrial “fishes” to be caught with the 
Hook of the Law which carry in their Gross-Indeterminate- 
Wage, or the price-lowering command which they wield 
over the apportionment of wealth (which is the “mouth” 
by which they “feed”) an easily separable standardized or 
“coined” value (the Accrued Increment of Urban Ground 
Rent) which bears upon it the “imprint of Caesar’s Image” 
and is exactly the amount required to meet the demands of 
the just Government! Even in the Old Testament, under 
the Mosaic Law, the agricultural land was made an inalien¬ 
able inheritance of the people, but the urban lots were sub¬ 
ject to sale and barter as chattels. That is, in the Mosaic 
Law the fundamental distinction between the nature of 
agricultural land and urban land is correctly made; in the 
New Testament, by the miracle of the Coin-In-the-Mouth-of- 
the-Fish the wonder of the nature and function of The 




UNITED STATES IMPROVEMENT BONDS 


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Accrued Increment is set forth in a manner which does not 
permit any other construction than that the singletax was 
thereby advocated by the Founder of Christianity. 

St. Thomas tells us that God by one act willed all things, 
and by one thought knows all things. In the matters of 
GOVERNMENT THE SINGLETAX is The Great Idea by which 
Public Policy wills all things that are in economics su¬ 
premely important and by which the economist knows all 
things that are worth knowing. He who does not know it 
in any of its forms knows nothing. But unless the econo¬ 
mist knows it better than the followers of Henry George 
know it, the country may be ruined by the attempt to 
adopt it. 

16. The Attempt To Levy The Singletax Without 
Compensation To The Owners Of The Expropriated Lands 
Would Ruin The Industries Of The United States And Be 
Impossible. —Let us suppose that Singletaxers of the school 
of Henry George had captured the marginal intelligence 
of cities, counties, states and the nation and were about 
to impose on the owners of all lands the unlimited single¬ 
tax according to their program; in fact, had imposed that 
tax. The effect would be to destroy immediately the selling, 
rental and taxable value of all agricultural, forest and min¬ 
ing land. That is to say, the purchasing power of the pres¬ 
ent titles amounting to fifty billion dollars would be 
destroyed. This value, although not productively employed, 
is continually indirectly drawn upon as a security for 
credits, mortgages and conveyances which sustain a very 
large part of the credit of the businesses of the nation. 
The sudden confiscation of this value would destroy abso¬ 
lutely a very large part of the credit on which rests the 
price-lowering control by which the 53,000,000 people, who 
are piled up in the cities of the United States, are sustained. 


138 


PUBLIC POLICY 


There is not a bank or an industry which would not be com¬ 
pletely ruined by this confiscation of so vast a part of the 
available credit of the nation. The great system of preda¬ 
tory price-raising privileges which we have inherited from 
the past has slowly grown up from obsolete uses which have 
been tolerated and not excluded, and with them we have 
developed an opposing system of defensive price-raising 
privileges. Just as a morbid growth on a living body must 
not be rudely torn from the flesh, for otherwise the patient 
would die from hemorrhage and surgical shock, so we have 
a similar condition in which industry suffers from the 
excrescences of price-raising privilege, both predatory and 
defensive. Just as the blood flows in and out of the morbid 
growth, so the credit of industry flows in and out of these 
legal forms. The price-lowering control over the apportion¬ 
ment of the tangible products of labor applied to land rests 
on credit, and primarily is credit, and if it were destroyed 
there would be no way short of physical seizure by which 
the agricultural products could be brought to the cities. 
Grass would then grow in the streets of the cities; the vast 
populations, starving and desperate, would swarm out into 
the country, and worse than Mexican conditions would 
ensue. More than half of the population would be threat¬ 
ened with immediate death by absolute starvation. The 
Singletax government would not, however, last long enough 
to be able to reduce the people to these extremities; the first 
preliminary crashes of the great industrial houses and the 
banks would put an end to its power. 

17. Henry George Did Not Understand The Nature 
Of Land Value And Therefore His Propaganda Has Failed. 
—The Fallacies Of George. —The reason the Georgian 
propaganda has failed is that it proposed to confiscate by 
taxation the value of all lands to their owners, and such 


UNITED STATES IMPROVEMENT BONDS 


139 


confiscation would be ruinous—the cure would be woree 
than the disease. George thought that it was impossible 
to compensate the owners of the value of the land because 
he did not know that the singletax would destroy the 
value of non-urban lands, and increase the selling value of 
urban lands hy the addition of many times the value thus 
destroyed, so that one class could he compensated out of the 
increase of the other. George was a Ricardian economist 
and did not understand the nature of any of the economic 
functions. He followed the professors of the schools and 
believed in their spurious science. George’s “Rent” is an 
accidental, malignant, price-raising “Rent.’’ It is an extor¬ 
tion treated as an economic function. Mill knew urban fac¬ 
tories had raised rent and wage and lowered prices for rural 
labor; George knew that cities made wages higher and prices 
lower, first to urban, then to rural industries; that rent of 
rural land rose from this cause, and that the city swallows 
the increase of the population, not the “Margin,” nor the 
agricultural industry. George had no share in the crafty 
subservience of Mill; he forced the professional economists 
to discover the DiffereniiaW^ by presenting in good faith 
as axiomatic this absurdity: 

* * The rent of land is determined by the excess of its producer 
over that which the same application can secure from the least 
productive land in use.^^ 

In this famous formula are assumed, implied, and explicitly 
stated the following fallacies which, in the aggregate, make 
up the whole of the formula: 

(1.) Rent arises from Decreasing Returns and not from 
Increasing Returns. 

(2.) Rent is paid for the use of agricultural land, 

(3.) Rent is part of the tangible produce, 


140 


PUBLIC POLICY 


(4.) Differences in Rent do not arise from differences in 
the active productive capacity of labor but from differences 
in the mere passive fertility of land. 

(5.) Rent is the excess of the produce of the land over 
what the same application can secure from the least pro¬ 
ductive land in use. 

(6.) Only the least productive land pays no Rent. 

(7.) Only land on which the least productive labor is, or 
may be, employed commands no Rent. 

(8.) The tax on Rent cannot be shifted. 

I will consider these fallacies, common to George and the 
Ricardian school, in the above order. 

Fallacy 1. That Bent Arises from Decreasing and Not 
from Increasing Returns. This proposition was explicitly 
stated by David Ricardo: 

^ ‘ If, then, good land existed in quantities much more abundant 
than the production of food for an increasing population re¬ 
quired; or, if capital could be indefinitely employed without a 
diminished return on the old land, there could be no rise of 
rent; for rent invariably proceeds from the employment of an 
additional quantity of labor with a proportionately less 
return. ^ * 

Works of David Eicardo (McCulloch), 1888, p. 37. 

This doctrine was first put forth in 1777 as a defense of 
the Corn Laws by Dr. James Anderson, a pamphleteer for 
the English squires, who, in order to justify the duties on 
grain which enhanced the price of food, said: 

foresee here a popular objection. It will be said that 
the price to the farmer is so high only on account of the high 
rents and avaricious extortion of proprietors. Lower (say 
they) your rents, and the farmer will be able to afford to sell 
his grains cheaper to the consumers. 

‘*In every country there is a variety of soils, differing from 
one another in point of fertility. These we shall at present 


UNITED STATES IMPROVEMENT BONDS 


141 


suppose arranged into different classes which we shall denote 
by the letters A, B, C, D, E, F, etc.; the class A comprehending 
the soils of the greatest fertility, and the other letters express¬ 
ing different classes of soils, gradually decreasing in fertility 
as you recede from the first. Now as the expense of cultivat¬ 
ing the least fertile soil is as great or greater than the most 
fertile field, it necessarily follows that if an equal quantity of 
corn, the produce of each field, can be sold at the same price, 
the profit of cultivating the most fertile soil must be greater 
than that of cultivating the others, and as this continues to 
decrease as the sterility increases, it must happen that the 
expense of cultivating some of the inferior classes will be 
equal to the value of the whole product.'' 

^^An Inquiry Into the Nature of the Corn Laws;" cited by 
Prof. Chas. Wm. Macfarlane in "Value and Distribution," 
pp. 91-93. 

This argument was continued by Malthus, who said: 

"It is not, however, the rent of the land that determines the 
price of its produce, but it is the price of the produce which 
determines the rent of the land.* 

"The reason why the real price of corn is higher and con¬ 
tinually rising in countries which are already rich, and still 
advancing in prosperity and population, is to be found in the 
necessity of resorting constantly to poorer land." 

Cited in "Value and Distribution," p. 95. 

Malthus got hold of a copy of the first Census Report of 
the United States, that of 1790, in which it appeared that 
the population had doubled every 25 years. He prepared 
an essay on the relation of the natural law of the unre¬ 
strained increase of population to subsistence which he first 
read to his father ^s club of English radicals which, under 
the leadership of William Godwin, was trying to introduce 
in England the doctrines of the Girondists of the French 

* This is true. B,ent, Wage and all values are determined by Price. 
But the tribute demanded for agricultural land is not Bent. But 
where Bent is the premium paid to substitute superior for inferior 
uses its payment is the final prerequisite to the maximum Full in 
Price. 


142 


PUBLIC POLICY 


Eevolution, particularly the teaching of Condorcet of the 
perfectibility of human society. Malthus argued from this 
Census Report that population naturally doubled every 25 
years, but that during these periods the increase in pro¬ 
ductive power from all causes would only have enabled the 
products of labor,—which he called “subsistence,’’—to have 
been increased at the end of each 25 years by a like amount 
which the entire population could have produced at the 
beginning. Thus population would increase in a geomet¬ 
rical ratio, while the product of labor or “subsistence” 
would increase in an arithmetical ratio. Thus if we repre¬ 
sent the population of a country by the numerals 1, 2, 4, 8, 
16 and 32 as it doubles every 25 years, Malthus argued that 
there would have been produced “subsistence” only for a 
population of 1, 2, 3, 4, 5 and 6, so that if they had enough 
when they started, at the end of 75 years, when population 
was to subsistence as 4 is to 3, they would begin to starve. 
This doctrine, attributing poverty to the scarcity of fertile 
agricultural land, and to the tendency of population to 
increase beyond the limits of subsistence, was eagerly seized 
upon by the Public Policy of the day, then engaged in a 
conflict with the French Revolution which promised in the 
name of ‘ ‘ Equality ’ ’ and abolition of class distinctions and 
privileges to bring about an increasing betterment in the 
economic condition of society. By the Malthusian argument 
the further progress of the revolutionary propaganda was 
Checked and thus halted for a century. J. S. Mill expressed 
this teaching, which under the guise of a conclusion of 
Political Economy was really the key-stone of the arch of 
the anti-revolutionary Public Policy which has preserved 
monarchy and privilege in Europe for a century and 
finally embroiled Europe in the present war: 

greater number of people cannot, in any given state of 
civilization be collectively so well provided for as a smaller. 
The niggardliness of nature, not the injustice of society, is 
the cause of the penalty attached to over-population. An unjust 
distribution of wealth does not aggravate the evil, but, at most, 
causes it to be somewhat earlier felt. It is in vain to say that 
all mouths which the increase of mankind calls into existence 



UNITED STATES IMPROVEMENT BONDS 


143 


bring with them hands. The new mouths require as much food 
as the old ones, and the hands do not produce as much. If all 
instruments of production were held in joint property by the 
whole people, and the produce divided with perfect equality 
among them, and if in a society thus constituted, industry 
were as energetic and the produce as ample as at the present 
time, there would be enough to make all the existing population 
extremely comfortable; but when that population had doubled 
itself, as with the existing habits of the people, under such an 
encouragement, it undoubtedly would in a little more than 
twenty years, what would then be their condition? Unless the 
arts of production were in the same time improved to an almost 
unexampled degree, the inferior soils must be resorted to, and 
the more laborious and scantily remunerative cultivation which 
must be employed on the superior soils, to produce food for so 
much larger population, would, by an insuperable necessity, 
render every individual in the community poorer than before. 
If the population continued to increase at the same rate, a time 
would soon arrive when no one would have more than mere 
necessaries, and, soon after, a time when no one would have a 
sufficiency of those, and the further increase of the population 
would be arrested by death.” 

Principles of Political Economy, Bk. 1; ch. 13, par. 2. 

Francis A. Walker attempted to explain the alleged law 
of rent in this way: Population first takes up all the best, 
or 25-bushel land. When that is all gone the increase is 
obliged to take up the 20-bushel land and the 25-bushel land 
commands 5 bushels rent. In this manner they get to the 
state where the increase of the population can only find open 
to it the “Free Land” where only 10 bushels can be pro¬ 
duced, or what is equivalent to a bare subsistence. Then 
all that can be produced above the yield of the 10-bushel 
land is “rent.” After setting forth thus particularly that 
rent takes all the product of labor above the yield to labor 
on the poorest land in use, he attempted to take the field 
against Henry George’s proposed confiscatory tax on what 
George also supposed was Ground Rent. In “Land and 
Its Rent” Walker argued that it is not true that rent takes 
all the produce of labor above a bare subsistence, and at- 


144 


PUBLIC POLICY 


tempted to show that the rents of urban sites do not follow 
the Ricardian formula. In this Walker was right. But he 
advanced this argument petulantly and in an abusive man¬ 
ner, using it as a club to whale George with it, and never 
developed the doctrine far enough to see in it the necessary 
total abandonment of the Ricardian formula and the doc¬ 
trine of decreasing returns which supports it. 

Fallacy 2. That Rent Is Paid for the Use of Agricultural 
Land. —All the Ricardian economists, when they attempt to 
set forth their alleged law of rent, speak only of the rent 
of farming land. But this sort of land has no economic 
value; its value or rent is derived only from the conjunction 
of two things, (1) the enormous increase in the productive 
power of labor due to inventions of cities which have mul¬ 
tiplied the productiveness of agricultural labor 15 times and 
the amount of available land 30 times, while the rural 
population has increased but 15 times; (2) the withholding 
of over 1,000,000,000 acres of fertile agricultural land from 
efficient use causes a price-raising fictitious value to attach 
to it. As the productive power of the excluded labor rises, 
the withholding of this unused land extorts an increasing 
portion of the agricultural wage. Levy the singletax and 
this fictitious value would wholly disappear and these lands 
would command neither rent nor taxes. There is more fer¬ 
tile agricidtural land in the United States than agricultural 
labor could ever devote to tillage, even if we had the entire 
'population of Europe here to help. Rent is a necessary 
economic expenditure demanded from the nature of pro¬ 
duction for the purpose of excluding inferior uses. It is 
not the mere legal exaction, which, although called ‘‘rent’’ 
in popular language, is not rent in the terminology of 
economic science. 

Fallacy 3. Rent Is a Part of the Tangible Produce .—^ 
In the state of diminishing returns assumed by the Riear- 
dians there can be no price-lowering control. But, never¬ 
theless, it is this control which is the Market and which 
manifests itself as Wage, Capital, Interest, Rent, Price and 
Value. Rent, like Wage, is never the tangible produce. 
Rent is a payment out of Wage by which competitors not 



UNITED STATES IMPROVEMENT BONDS 


145 


excluded by the Fall in Price and Rise in Wage are finally 
excluded. Being derived from Wage it is, like Wage, an 
allotment of the price-determined control over the whole 
of the tangible goods exchanged on the Market; it is never 
the tangible goods themselves. Rent, Wage, Capital and 
Value all flow out of Price, that is, from the Fall in Price. 
From this little magic “nut” at the head of the stream flow 
all the waters of the great industrial river of life. 

Fallacy 4. DiffereMces in Rent Do Not Arise From Dif¬ 
ferences in the Active Productive Capacity of the Differen¬ 
tial Factors, but From Differences in Mere Passive Capacity 
of Lands. —It is true that some lands are more fertile or 
useful than other lands, but the differences in the passive 
utility of lands is small compared with the differences in 
the active capacity of the differential factors which may 
use them or compete for them. As much as the lands, 
therefore, may differ, the differential factors differ still 
more, and for any piece of land for which two may compete 
one of them can always tender a price for the privilege of 
exclusion. Hence if every square foot of land on the sur¬ 
face of the globe was taken, rent would rise as the premium 
paid by a more efficient user to exclude a less efficient user. 
As the efficiency of the competing users rose, the rent would 
be wholly determined by the variation in the efficiency of 
these competitors, and not in any degree at all by the passive 
qualities of the land. That is, where two causes exist by 
which the productiveness of the Differential Factors is made 
to vary, one of slight importance, as the variation in the 
passive qualities of the land, and the other of great impor¬ 
tance, as the variation in the active powers of the Differen¬ 
tial Factors, the factor contributing to the slight variation 
is negligible. The Indian required a square mile of fertile 
land to hunt in, and the present inefficient farmer sprawls 
over 100 acres. Neither of these uses of land determine its 
possibilities, for the natural powers of each tract varies to 
the individual producers more than they vary among 
themselves. 

Fallacy 5. Bent Is the Excess of the Produce of the 
Land Over What the Same Application Can Secure From 


146 


PUBLIC POLICY 


the Least Productive Land in Use. —Note again the Kicar- 
dian expression “produce of the land/^ The land produces 
nothing but game, fruits and mineral deposits. In “secur¬ 
ing’’ this produce the wild Indian required a square mile 
of land to make a living in, but even then the game did not 
walk into his tepee and beg to be eaten. 

The value of the product of labor is the price it brings. 
That is, we call the distributive price of each of the several 
products its “price,” while the amount realized by the 
whole of the product is the “value” of the product. The 
value of the product as a whole is Gross Indeterminate 
Wage which rises as “price” falls,—^that is. Value or Wage 
rises as Price falls. Without the Fall in Price there would 
be neither Value nor Price, and hence there would be 
neither Wage nor Pent. 

Now we have seen that Rent is never the tangible product. 
The product of labor applied to land which the Market 
apportions (and, by apportioning this, also apportions the 
tangible products or the Ricardian “produce”) is the 
price-lowering control over apportionment. The Market 
never directly apportions the tangible produce, but always 
makes allotments of individual shares in the price-deter¬ 
mined control over all the goods coming into the Market. 

It is clear, therefore, that if Rent is the whole of the 
“excess” of the “produce” at one place over the other 
there can be no gain distributed as the Fall in Price or as 
the Rise in Wage. Even if Henry George had been able to 
have levied his Singletax, there could not have continued 
to be, under his formula, any further Fall in Price or Rise 
in Wage. For when the new margin had been established, 
rent would necessarily have taken all the excess above that 
produced on the margin of the “Free Land” and “Social 
Growth” would have distributed no Fall in Price or Rise in 
Wage, for if it could, some of the excess*^ would have 
gotten away from Rent. The “rent” which takes all the 
“excess” is the price-raising “rent” which would make 
the cost of the reaper to the man at the margin so great 
that he would not be benefitted by discarding the sickle 
for it. Hence there could be no improvement of method 


UNITED STATES IMPROVEMENT BONDS 


147 


possible on the ‘‘rent-producing’^ land or “at the mar¬ 
gin,” which could be followed by a ga/in, or Rise in Wage. 
If any of the benefits of the Fall in Price and Rise in 
Wage accrue at the margin,—if new and improved ma¬ 
chinery and other implements of civilization can be sold 
there at a price which makes it more profitable to buy them 
than to go without them,— then this so-called ‘^renV^ does 
not take all the excess. Hence there can be no rise in the 
Georgian Rent attaching to an increased area, even after 
the Georgian “margin” of the “Free Land” is established 
by the Singletax, unless the whole of the benefit of ‘ ‘ Social 
Growth,” that is, of the Fall in Price and Rise in Wage, is 
appropriated by Rent. Wage must steadily fall as the 
increase of the population employed on less desirable land 
is deprived by Rent of all the gains of “Social Growth” 
beyond that great gain which they may be supposed to 
have received by the institution of the new “margin” in 
the Georgian system. 

The Georgian “rent” is a Ricardian price-raising Chi¬ 
mera which has no relation whatever to real rent, that 
price-lowering cost of production paid for the use of urban 
sites which is the prerequisite to the securing for labor of 
all “excess” attained by superior methods over the obso¬ 
lete methods of past generations.* 

Fallacies 6 and 7. Only the Least Productive Labor 
Pays No Rent; And, Only Land on Which the Least Pro^ 
ductive Labor Is or May Be Employed Commands No Rent. 
—Rent is the premium paid to exclude from the use of the 
place those industries not excluded by the Fall in Price 
and Rise in Wage. The vast abundance of agricultural 
land, accessible and equally fertile and desirable, will make 
the payment of rent unnecessary to exclude inferior sorts 

* We know that the average yield of corn is about 25 bushels per 
acre on land on which fairly good farmers get 75 bushels per acre. 
These of course do not *‘make the same application.** But if the 
rent or value of the land is the same, is the rent the excess’^ above 
what the good or the bad farmer would produce on the best land to be 
had for nothing? As they all differ among themselves in efficiency, 
we find that the “productiveness’’ of the marginal land is a very 
indefinite conception. 


148 


1>UBLIC POLICY 


of farming. These will there be excluded by the Fall in 
Price and the Rise in Wage. But the labor on these lands 
will not be the least productive labor. The increasingly 
great investments of capital in highly improving these lands 
will rapidly tend to obliterate the differences arising from 
the natural conditions or characteristics of the land, and 
further and continual improvement in the conditions of 
transportation will eliminate the advantages of time and 
place with reference to location so far as agricultural prod¬ 
uce is concerned. 

On the other hand, those industries of the greatest func¬ 
tional importance which have eliminated all competition by 
the Fall in Price and the Rise in Wage will tend, more and 
more, to form one integral industrial entity,—the Industrial 
Upper Limit. For the lands used by them there will be no 
competitor to tender the price of exclusion. They will have 
risen far above the range of rent. These industries of 
supreme functional importance, upon whose prosperity all 
other industries are absolutely dependent, manifest them¬ 
selves in the beginning in the function of transportation 
out of which all cooperation arises. Without the physical 
movement of goods there could be no cooperation, no in¬ 
creasing returns and no Fall in Price, Rise in Wage and 
Rise in Rent. But the common ways have always been kept 
open to free use. Close up the wagon roads of the country 
and the streets and alleys of the City and all values would 
immediately disappear. It is because the labor that is car¬ 
ried on on this ‘ ‘ Free Land, ’ ^ the common highways, is the 
most productive of all labor (because of the greater func¬ 
tional importance) that they are ^‘free land.’^ There will 
come a time when the Industrial Upper Limit, having 
complete price-determined control over the functions of 
INDUSTRY, will stabilize the fall in price by abolishing all 
transportation charges, just as the great office building has 
established free transportation in the elevators for pas¬ 
sengers. 

There are, in fact, three zones of the industrial area con¬ 
sidered with reference to Rent: (1) The No-Rent Lands 
which are heneath Rent, or, the agricultural areas; (2) the 


UNITED STATES IMPEOVEMENT BONDS 


149 


No-Rent lands of the great industrial functions which are 
above Rent, and (3) a narrow area within the boundaries 
of cities where the industries not of supreme and controlling 
functional importance struggle with those which they can 
not exclude by the Fall in Price and Rise in Wage, and 
which can secure for themselves the choice sites only by the 
Rise in Rent. 

Fallacy 8. That the Tax on Rent Cannot Be Shifted .— 
It is because the Ricardians supposed Rent to be a phe¬ 
nomenon of decreasing returns that they affirmed most posi¬ 
tively that the tax on Rent could not be shifted. This 
premium which they assert the “niggardliness of nature” 
extorts from the tenant by the act of the landlord and 
which they call “rent” is never price-lowering rent, hut 
the revenue which would cease to be as soon as any consid¬ 
erable tax was laid upon it, so that it could not even then 
exist to be taxed. But the ill-omened Chorus recites: 

^^Ground-rents are still a more proper subject of taxation 
than the rent of houses. A tax on ground-rents would not 
raise the rents of houses. It would fall altogether upon the 
owner of the ground-rent, who acts always as a monopolist, and 
exacts the greatest rent which can be got for the use of hia 
ground. ^ ^ 

Adam Smith, “Wealth of Nations,“ Bk. v., c. 2, pt. 2, art. 1. 

“A tax on rent would affect rent only; it would fall wholly 
on landlords, and could not be shifted. The landlord would not 
raise his rent, because he would have unaltered the difference 
between the produce obtained from the least productive land in 
cultivation, and that obtained from land of every other quality. ’ * 

Eicardo, “Principles of Political Economy and Taxation,“ 
ch. 10, par. 62. 

“A tax on rents falls wholly on the landlord. There are no 
means by which he can shift the burden upon anyone else. 
... A tax on rent, therefore, has no other effect than its 
obvious one. It merely takes so much from the landlord and 
transfers it to the state. 

J. S. Mill, “Principles of Political Economy,“ Bk. v, ch. 3, 
No. 2. 


150 


PUBLIC POLICY 


tax on rents cannot be transferred. A tax on commod¬ 
ities is always transferred to the consumer.^’ 

Thorold Eogers, Political Economy, 2nd Ed., ch. xxi, p. 285. 
land tax levied in proportion to the rent of land, and 
varying with every variation of rents . . . will fall wholly on 
the landlords. 

Walker, Political Economy, Ed. 1887, p. 413. 

^^The incidence of the ground tax, in other words, is on the 
landlord. He has no means of shifting it; for, if the tax 
were to be suddenly abolished, he would nevertheless be able to 
extort the same rent, since the ground rent is fixed solely by 
the demand of the occupiers. The tax simply diminishes his 
profits. ’ ’ 

Seligman, ^‘Incidence of Taxation,’’ pp. 244-245. 

‘‘With these assumptions, it is quite clear that the tax on 
economic rent cannot be transferred to the consumer of the 
produce, owing to the competition of the marginal land that 
pays no rent, and therefore no tax, nor to the farmer, since 
competition leaves him only ordinary profits.” 

Nicholson, “Principles of Political Economy, Bk. v, ch. xi. 
Nos. 1-4. 

Now it is evident from what has been said before in the 
argument of this chapter that because we have 871,000,000 
acres of wholly unused fertile agricultural land (including 
100,000,000 acres requiring drainage and irrigation), that 
if the whole of this vast unused and continental area, 24 
times the area of the state of Illinois, were thrown on the 
Market to be immediately disposed of for whatever it would 
bring, that none of it, or any of the 479,000,000 half-used 
acres of the improved agricultural land of the Nation, would 
have any value at all. There would be no one to tender the 
price of exclusion, since there is more than could ever be 
used for tillage. The value of this land gone, it would 
command no rent and it could not be taxed. This value, 
therefore, is not rent in any proper sense whatever. 

But if the value of the agricultural lands disappeared 
because that present value is wholly fictitious, such would 
not be the case with the rental or selling value of urban 
lots. As the competing differential factors increased in 


UNITED STATES IMPROVEMENT BONDS 


151 


number and in wage they would tender a continually in¬ 
creasing rent for the privilege of exclusion and this rent 
would be collected by the landlord as the promoter of the 
best uses of sites from the tenants. The Maximum Rise in 
Wage, produced solely by the taxation op ground rent, 
would bear the burden, not the landlord, and upon it the 
SINGLET.VX would be shifted,—for the taxation of real 
ground rents will always increase the rental or income of 
the landlord. Real ground rent is always price-lowering 
or price-determined rent, the last payment required by the 
law of increasing returns to be made for the purpose of 
excluding inferior methods. The fictitious Georgian rent is 
that rent which is ‘ ‘ price-raising ’ ’ and which ‘ ‘ enters into 
Price and it will be destroyed by the singletax and no 
longer survive for Singletaxers to experiment upon. 

18. In The Ricardian System As Expounded By Henry 
George And The College Professors There Is Not A Single 
Definition, Formula Or Generalization That Is True.—The 
New Discoveries Of The Professors. 

(a) The formulas of the Ricardian economics are all 
false. The formulas upon which Karl Marx and Henry 
George founded their systems were the definitions and 
formulas of David Ricardo and J. S. Mill. Every one of 
these definitions and formulas is deduced a priori from 
the assumption of diminishing returns. Every one of 
these definitions and formulas is false. Price, Value, Wage, 
Capital, Interest and Rent, as actual phenomena of the 
Market do not any of them remotely resemble the night¬ 
mares that bear their names in the Ricardian system. 
Until George appeared the Ricardian system was taught 
in all colleges. 

(b) The new discoveries of the Professors. Henry George 
and his followers have said many bitter things about the 
college professors because the latter would not accept the 
logical but humanitarian form of their teachings as for- 


152 PUBLIC POLICY 

mally deduced by Henry George. If Rent confiscates all the 
excess above the Ricardian ‘‘bare subsistence/ George ar¬ 
gued, justice demands that the landlords be pushed aside 
and Rent confiscated by the singletax. But the professors, 
unable to deny the justice or to meet the logic of Henry 
George, when brought face to face with the rediictio ad 
absurdum of their own system, took to the woods. Henry 
George, in fact, pulled down the Ricardian house of cards, 
and since the publication of “Progress and Poverty” the 
professors have learned not to emphasize, as they formerly 
did, the doctrine of Diminishing Returns, although it still 
lingers as the substratum of all their confident generaliza¬ 
tions. Nevertheless, they have made some progress, as they 
abandoned their old systems, towards the elucidation of the 
formulas of a real science of Political Economy in the mat¬ 
ter of the following teachings : 

(1) The Doctrine of Differentials .—The Industrial fac¬ 
tors are each of them different from the others in the 
direction and the scope of their power. Hence they are 
called ‘ ‘ The Differential Factors, ^ ’—a term unknown to the 
early Ricardians and to Henry George. As the ‘ ‘ Differen¬ 
tial Factors” produce at different costs, there are the 
“Differential Costs”; and, as they sell with different gains, 
there are the “Differential Gains.” 

(2) The Doctrine That Cost Does Not Enter into Price. 
—The trend of modern inquiry has been away from the 
Ricardian assumption that Price is determined by the cost 
of production. Malthus and the early Ricardians stated 
correctly that Rent does not enter into Price and this doc¬ 
trine has been constant with the Ricardian schools. But it 
was based on the teaching that Rent could not enter into 
Price because Price was determined by the cost of produc¬ 
tion under the most adverse circumstances to which the 
necessities of society in the assumed state of Diminishing 
Returns compelled it to have recourse,—^that is, the cost of 
production on the “Free Land,” the worst in use, where a 


UNITED STATES IMPBOVEMENT BONDS 


153 


bare subsistence only could be obtained. But the doctrine 
of the Diiferentials is superseding the teaching that price is 
determined by the Cost of Production. For it has been 
found that the cost of production is not the same to the 
Differential Factors and that the more efficient producers, 
hy their productiveness, are constantly excluding their 
rivals by underselling them, so that the excluded fac¬ 
tors cannot recover their costs, while the excluding fac¬ 
tors are selling for a profit above their costs. Hence it has 
been found hy some of the more intelligent professors that 
none of the costs of production enter into Price,—neither 
Wage, nor Costs of Material, nor Interest, nor Bent. The 
first of the professors to make discoveries of this nature was 
Francis A. Walker, who in his “Wages Question” pub¬ 
lished in the ’70’s advanced what was to the Ricardians a 
most revolutionary doctrine, viz., that the Fixed Wages of 
Directed Laborers was not paid out of a Wages-Fund accu^ 
mulated hy the savings of the penurious and thrifty, hut 
was paid out of the increased output of the more skillful 
labor,—that is, that wage was a phenomenon of Increasing 
Returns, Walker did not, however, have sufficient stability 
of mind to retain this conclusion long; he soon forgot it, 
for he loved to wallow in the Ricardian mire. 

(3) The Discovery of the Two Monopolies, price-lower¬ 
ing and PRICE-RAISING Monopoly. —Professor Charles Devas 
of Stonyhurst College was, so far as I know, the Ricardian 
who discovered this profoundly important and fundamental 
truth. He said there are two monopolies; one maintains 
itself by underselling all competition and is therefore a 
^^Price-Determined Monopoly,’^ because it is determined by 
“Price,” and the other is maintained by some legal privi¬ 
lege which enables it to cheapen production and to exclude 
competition and thereby to raise prices, and therefore he 
called it the ^^Price-Determining Monopoly/^ I do not like 
his terminology, however, and employ the terms above, 
calling the “Price-Determined Monopoly” of Devas, the 
Price-Lowering Monopoly,*^ and the other the ^^Price- 
Raising Monopoly. Hence we find that those “costs” 
which are the result of the exactions of price-raising priv- 


154 


PUBLIC POLICY 


ilege “enter into Price^^; but costs arising from the legiti¬ 
mate expenditures of the excluding factors able to maintain 
themselves as a part of the vast price-lowering monopoly 
which is the Market, do not enter into Price. 

While among the professional economists there has been 
some sporadic development of economic truths, “islands’’ 
and “oases” in the midst of the vast expanse of Ricardian 
meaninglessness, the most of them have engaged in aimless 
metaphysical subtilties by which they sought to explore the 
mystery of “Value” in the supposed state of Decreasing 
Returns. This sort of effort has presented us with the 
works of Boehm-Bawerk, Smart, Macfarlane and Daven¬ 
port, as well as the Singletaxer Trowbridge, who tell us 
that “Price” is the ^^MargiTial-Competitive-Social-Indus- 
trial-Utmty^^ of a product of labor. In other words, 
“Value,” used as synonymous with “Price,” is a purely 
sentimental or psychic phenomenon. But, while it is true 
that all men will seek to gratify their desires with the least 
amount of trouble, the power to exert industrial command 
over their willing obedience is not a matter of sentiment, 
but arises from superior industrial power, the power 
which produces Increasing Returns and which lowers Price. 
The desire which prompts men is a sentiment, but the abil¬ 
ity to gratify that desire is not a sentiment, and this is 
exactly what the so-called “Austrian-Theory of Value” of 
Boehm-Bawerk, Smart, Macfarlane, Davenport and Trow¬ 
bridge overlooks. 

Value, Price, Wage, Rent, Capital and Interest are all 
manifestations of monopoly-power; unless there is a mo¬ 
nopoly of some kind there can he none of these phenomena. 
The Ricardians sought to derive the monopoly from the 
niggardliness of nature; the resulting increasing scarcity 
conferred an increasing monopoly-power upon all owners 


UNITED STATES IMPROVEMENT BONDS I55 

of the products of labor as well as upon all those who con¬ 
trolled the use of the natural media (land). By niggardly 
thrift the niggardliness of nature was to be countered; by 
being meaner than with the meanness attributed to nature 
the penurious could out-devil nature, and, like Mun¬ 
chausen’s wolves, eat their way into the harness. To them 
Value is the stress of an increasing ungratified desire, the 
Hunger of the World, upon the power to gratify a physical 
necessity, for they can imagine no other condition than that 
of a starving and hungry population compelled by necessity 
to toil for bare subsistence. Professor George Gunton, as 
the attacks of Henry George drove the professional econo¬ 
mists from the open proclamation of Diminishing Returns, 
attempted a fiank movement in which he also tried to derive 
Value from a sentiment, and to admit a state of Increasing 
Returns without developing the necessary formulas of In¬ 
creasing Returns. According to Gunton Fixed Wage is 
determined by the ‘‘Standard of Living.” Culture and 
convention established a certain “Standard of Living”; if 
a people cannot get that they will fight. But Gunton does 
not tell us why that standard is an advancing rather than a 
receding one; for supposing that we are exceedingly war¬ 
like, how can we by fighting increase the product of labor 
when our utmost labor only produces a bare subsistence? 
Wealth is not produced hy fighting. Professor John B. 
Clarke of Columbia University has the notion that Capital 
does not really consist of the stock in trade in the mer¬ 
chant ’s establishment, or of the tools and machines used; it 
is a sort of a stream of tangible goods going through the 
Market,—the current that is ever flowing but never passes. 
Capital, he says, is something “fluid,” and it is “money’s 
worth.” The merchant does not consider his stock of 
shoes, counters and so on “Capital”; his capital is the 


156 


PUBLIC POLICY 


money he has invested in the business or the money he can 
get out of it. That is, Professor Clarke saw that Capital has 
something to do with the stream of goods, but is not the 
goods. The Ricardian supposes that Capital is the tangible 
product of labor in the course of exchange, the tools and 
implements of production, for the Ricardian knows of no 
product of labor applied to land which is desirable other 
than the tangible goods themselves. But, in the Ricardian 
system there is something other than tangible goods which 
is produced by the application of labor to land. On account 
of the over-increase of the population and the meanness of 
the Author of Nature there is a state of Diminishing Re¬ 
turns. This gives an increasing starvation intensity to the 
natural desires, and they have attempted to measure the 
tension of this gravital pull to the economic bottomless pit 
as the explanation and theory of Value, Cost, Price, Rent, 
Wage and all other manifestations of the law of apportion¬ 
ment of the Market. 

19. Ricardian Economics An Illegitimate Offshoot Of 
The Public Policy Of The 18th Century. —The nightmare 
of Ricardian economics is the afterglow of the French Revo¬ 
lution, which was itself rooted in the French and English 
political history of the prior century. 

In 1648 the Thirty Years’ War was ended, and Europe 
was compelled by exhaustion to cease fighting over religious 
differences. But the raging sects merely waited their time, 
and, when the wounds caused by the Reformation had been 
healed, they would have started up the fighting again. To 
many minds, as to Pierre Bayle, these obstinate, pugna¬ 
cious believers were abhorrent, and it occurred to him that 
if the doctrine could be universally promulgated that no 
certainty could be attained in matters of religion peace 
would remain, for men would not fight for what they did 
not think was worth fighting for. Bayle founded the great 


UNITED STATES IMPROVEMENT BONDS 


157 


school of Agnosticism, which was wholly unheard of in 
Western Europe prior to the Reformation. 

By sedulously preaching the doctrines of Agnosticism 
(from which afterwards Voltaire borrowed all his light¬ 
nings) Bayle indoctrinated the leaders of Public Opinion 
among the thinking elements of Europe. His philosophy 
had become quite popular at the time of the English Revo¬ 
lution of 1688. 

In 1688 James II, expelled from England, went to France 
and was taken up by Louis XIV, the greatest politician in 
Europe. He conceived the plan of forming a political 
party, aiming at the restoration of James II to the English 
throne, based on two planks, one for the conservatives, viz., 
that James was the “legitimate’’ king; and another for the 
radicals, viz., that James, if restored, would grant religious 
toleration. Thus the Jacobite Party, the first political party, 
was formed which has shaped the course of all modem Public 
Policy and from which we have inherited the principles of 
the Constitution and the Declaration of Independence, the 
writings of Paine, Jefferson, Madison and the founders of 
this nation, and from which we have derived the primitive 
Physiocratic science of Political Economy and the spurious 
Ricardian science of Political Economy, as well as the 
Masonic Order and some other incidentals. 

There was in London at this time a man of genius, the 
architect who designed St. Paul’s, Sir Christopher Wren. 
The old guilds had been abolished and no contracting masons 
any longer concerned themselves about keeping alive the old 
guild to which Sir Christopher had belonged. But he loved 
the ancient, impressive medieval ceremonies, and filled up 
the offices in the guild with the young men, sons of his 
clients, and used to entertain them there. Wren was a 
philosopher and an agnostic and a radical according to the 
spirit of his age; but, as he had been pensioned by the king, 
he did not propose to get mixed up in conspiracies. Among 
the young men in his circle was Bolingbroke, who after¬ 
wards attained some fame as a Platonic philosopher. 
Bolingbroke proposed to the others, that as the old “oper¬ 
ative Masons” no longer employed the forms of the guild, 


158 


PUBLIC POLICY 


that they, the young men who had succeeded to the offices, 
should form an order of ^‘Philosophical Masons.” As the 
old Masons built castles, cathedrals and houses, so the 
“Philosophical Masons,” employing the great Jacobite doc¬ 
trine of religious toleration, would build the metaphysical 
castles, cathedrals and structures which would house the 
future generations of men. After the death of Sir Chris¬ 
topher Wren they proceeded to carry out Bolingbroke’s 
plan, and three lodges of “Philosophical Masons” were 
founded, one at Calais, one at Havre, the port of Paris, and 
one at Paris. There in time the Frenchmen came, and as the 
king and the Church both favored those who for any reason 
planned the restoration of James II as a Catholic king, the 
“Philosophical Masons” started oif with the blessings of 
the Church and with the financial support of both king and 
clergy. It was found necessary, however, to invent the myth 
of the foundation of the order of Bolingbroke by King 
Solomon, or the legend of its existence at the time of the 
building of his temple, to remove the strong Anglican flavor 
offensive to the French. After this the Frenchmen took to 
it, and in the Jacobite Lodges, Masonic Lodges, and Jacobite 
Clubs, as the meetings of the Philosophical Masons were 
indifferently called, three generations of educated French¬ 
men and English exiles discussed the fundamental prin¬ 
ciples of GOVERNMENT. There it was found desirable to 
“tolerate” other sorts of freedom besides religious freedom, 
—the freedom to engage in Useful Work, for instance. Out 
of their discussions came the finished and polished phrases 
which shine in the Declaration and Constitution, in the 
writings of Paine, Jefferson and Madison. Finally out of 
the Jacobite agitations, and particularly the “lodges” of 
the “Philosophical Masons” laboring for the Jacobite cause 
in France, came an entire literature which evolved the for¬ 
mulas of modern democracy and Political Economy. 

Newton ^s theory of gravitation was propounded in 1689; 
soon after the steam engine and the first spinning machinery 
was invented. Powerful moral, intellectual and industrial 
forces were at work undermining and dissolving the old 
regime. While the grand seigniors of France read with 


UNITED STATES IMPROVEMENT BONDS 


159 


delight in their medieval castles amidst their despised and 
starving peasants Kousseau’s “Social Contract” and the 
romance of “Paul and Virginia” and professed to long for 
the primitive state of nature, the first Physiocrats were 
expounding the natural laws of growth as the formulas 
which should be followed by government. First it was 
declared that there is a natural moral law, corresponding to 
Newton’s formula of gravitation. You see the people in the 
city going in all directions, but their movements are not 
controlled by chance. Every man seeks to gratify his desires 
with the least amount of trouble, and this was declared to 
be the first, primary law of human association. Next Can- 
tillon discovered that all wealth was the product of labor 
applied to land. Then the money-trapping trade restric¬ 
tions of the Merchantilists were denounced by a number of 
brilliant writers of the more moderate “Economists” as 
they were then called, Herbert, Morellet, Clicquot, Bler- 
vacho. Bigot de St. Croix, 1 ’Abbe Coyer and Courney, their 
leader; while the better and abler number followed Ques- 
nay,—Turgot, Mirabeau, Baudeau, Abeille, Du Pont de 
Nemours, Roubaud, St. Peravy, Letrosne, Le Mercier de la 
Riviere, Karl Freidrich (Margrave of Baden) and Con- 
dorcet, of whom the elder Malthus, William Godwin and the 
English radicals, whose pamphlets Thomas Paine devoured 
when a youth in England, were followers. It was in 1763 
that Adam Smith met the French economists of this school 
and learned from them the elements of their science which 
he put forth with great moderation in his “Wealth of 
Nations,” published in 1776, for the Declaration of Inde¬ 
pendence and the first treatise on Political Economy pub¬ 
lished in the English language, appeared in the same year, 
and both received their inspiration from the same source. 
Dr. Francois Quesnay (b. June 4, 1694; d. Dec. 16, 1774) 
was the greatest of all the “Economists” or “Physiocrats.” 
Adopting the teaching of Cantillon that all wealth is the 
product of labor applied to land and the maxim that all 
men seek to gratify their desires by the least amount of 
trouble, he held that government should make its laws con¬ 
form to the necessities of these two primary requirements 


160 


PUBLIC POLICY 


of voluntary action so that thereby its powers would not be 
oppressively exercised. Natural law, he claimed, is a benefi¬ 
cent power, it is the law of growth and there can be no last¬ 
ing progress without conforming to it. By natural law all 
wages, prices and values are fixed, and it is by natural law 
that of the values produced by the application of labor to 
land that all values, except the value that attaches to land, 
are distributed, but the value that attaches to (agricultural) 
land tends to pile up on the place and is not distributed by 
natural law. He called this value that attaches to the land 
the ^‘Product Net^^ and argued that it is the sum which 
natural law tenders to government as the sole proper and 
legitimate source of public revenue. He therefore advo¬ 
cated the imposition of one tax in place of all other taxes, 
L ’Impot Unique, the singletax, which, like Henry George, 
he thought was a tax which could not be shifted. His book 
set forth arguments which he had long advocated and which 
had not interfered with his appointment as “King’s Phy¬ 
sician,” the highest attainable place in his profession, and 
was published in 1772, entitled ^^Physiocracy, or the Greater 
Advantage to the Human Race of the Natural Constitution 
of Governments^ When Louis XVI came to the throne he 
was 18 years old, and Quesnay lived seven months after¬ 
wards. The young king was so much impressed with the 
justice of Quesnay’s system that he attempted to reform 
the tax system of France in accordance with it and called 
to power Turgot, Quesnay’s greatest disciple, and made him 
Minister of Finance. So near did the Singletax come to 
saving France! But the Clergy and Nobility rebelled at it, 
becaurse, like Henry George’s singletax, it involved the 
confiscation of landvalues, and this brought on the Revo¬ 
lution. 

The Physiocrats attached supreme importance to the laws 
of nature. Nature to them was a beneficent power, the 
forces of nature are all harmoniously adjusted to human 
nature and to human needs. When the Revolution broke 
out Condorcet and the surviving economists of the old school 
went with the Girondists and they perished with the slaugh¬ 
ter of the Girondists by the commune of Paris under 


UNITED STATES IMPEOVEMENT BONDS 161 

Robespierre. And Condorcet had argued that by conform¬ 
ing to the laws of nature man might hope to abolish both 
poverty and old age! 

Borrowing certain phrases from the Physiocrats, the rab¬ 
ble, who were inflamed by the declamations of Rousseau and 
followed the leadership of Robespierre and Marat, empha¬ 
sized the doctrine of equality. *^Man is horn free, hut is 
everywhere in chains,*^ said Rousseau. Here was the nat¬ 
ural law to which man must conform to prosper; cut off the 
heads of all the aristocrats and kill off all those who think 
themselves to be better than anybody else and you will have 
established ^ ‘ liberty, equality and fraternity. ’ ^ The fol¬ 
lowers of Robespierre and Marat called themselves ^‘Ja¬ 
cobins, ^ ^ naming themselves after the heroic clubs long since 
passed away, and by their atrocious crimes they made the 
name of the great party odious. Their remedy for all social 
ills was the guillotine and the Terror, and it was to meet 
this condition that the Ricardian economics were devised. 

Thus we see that the Ricardian economics was a necessary 
development of the crafty Public Policy of the Eighteenth 
Century. For seventeen years the French Revolution had 
embroiled all Europe in war. These wars seemed to have 
had their origin in the agitations of the followers of Rous¬ 
seau and, to some slight extent, from the promulgation of 
the Declaration of Independence and the Constitution of 
the United States. If the agitation of the “rights of man’* 
involved such consequences, that agitation must be stopped. 
We can not realize the fear and horror with which the 
responsible minds of Europe,—not the “nobility,” but the 
persons responsible for the direction of Useful Work,— 
regarded the excesses of the French Revolution, for the lat¬ 
ter was, in fact, a perfect pandemonium of insanity. The 
Ricardian economics was necessary to prevent the universal 
spread of such madness and it has served a useful purpose. 
But it has at last involved the nations of Europe in a greater 


162 


PUBLIC POLICY 


war than any of those of Napoleon. The leaders of Europe 
have all been trained in the Ricardian system, of which all 
modem economic sects or cults are offshoots, not only the 
dull system of the colleges, but the system of Marx and 
George as well as the negations of the Anarchists. Marx 
and George tried to humanize it; the Anarchists accept its 
gloomy conception as the necessary consequences of Gov¬ 
ernmental authority. In international policy its effect has 
been to teach that the interests of each nation are in con¬ 
flict with the interests of every other nation; there is not 
enough prosperity to go round; if you want place in the 
sun/* you must kick the other fellow out of your way. So 
that while Ricardianism checks and suppresses the agita¬ 
tion for Utopian schemes of betterment and gives to the 
demagogue a hard road to travel, it finally arms naticm 
against nation and fills the world with misery amd hatred. 
It is an illegitimate development of Machiavellian Public 
Policy which lies to accomplish its purpose. If you teach 
the people that nothing can be done to better their condi¬ 
tion ; that poverty is the result of natural law; that in the 
struggle for existence only the strong, the mean or the 
deceitful survive, they will incorporate these lies in their 
Public Policy. A lie may serve a temporary purpose, but 
in the end it will bring its harvest of death. 

20. Because Of The Fact That Ground Rent Does Not 
Attach To Agricultural Land There Will Be No Attempt 
To Levy The Singletax Upon The Value Of Improved 
Farms. —Ground Rent, or land value in the economic sense, 
does not attach to agricultural land except as a temporary 
characteristic. Just as, in the flrst instance of its applica¬ 
tion at the time of the issue of the Improvement Bonds of 
the United States, the levy of the Singletax will enrich many 
owners of urban lots by reason of the sudden rise in the 


UNITED STATES IMPEOVEMENT BONDS 


163 


value of these lots, so many owners of improved farms will 
profit. For no attempt can logically be made to levy any 
tax upon the value of improved farms, and until the entire 
body of unimproved lands are thrown on the Market, and 
the value of the greater part of the agricultural land de¬ 
stroyed, a value which could he the subject of taxation will 
attach to most improved farms. But the tax which will be 
levied will not appropriate Ground Rent except where it 
falls on the value of urban lots, and the tax which will be 
levied on agricultural land will rather be in the nature of 
a penalty for withholding such land from use, rather than 
an attempt to appropriate Ground Rent. For that reason 
the value assessed as the present annual value of improved 
farms will not be collected from their owners,—the assess¬ 
ment being made merely for the purpose of appraising the 
amount for which they will be compensated for the value 
to be destroyed. The assessment will be imposed on the 
title owners of the unimproved lands and these lands will 
be sold so as to force into use the resources of the country. 
An arbitrary decision must be made in many cases to deter¬ 
mine whether a partially used, or imperfectly improved 
farm, could be classified as an improved farm or not. Fa¬ 
voritism might be disclosed in many cases, but it may be 
assumed that the pressure would immediately be great 
enough to force into the Market the greater part of the 
unused and unimproved land. But the improved farm 
would bear no tax and be threatened with no tax, while the 
owner would have the written guaranty of the United 
States which would allow him for 25 years an annual credit 
equal to the present annual rental value. 

21. The Seventy-Five Billion Dollar Issue Of The Im¬ 
provement Bonds Of The United States. —^Let us suppose 
that the present rental value of all urban, agricultural, min- 


164 


PUBLIC POLICY 


eral and forest land of the United States has been carefully 
assessed, and that it has been found that the annual rental 
value of the agricultural, mineral and forest land is 
$3,000,000,000, or about 6 per cent interest on a valuation 
of $50,000,000,000, worth of wholly unproductive capital 
now sponged up in the value of the titles. We propose to 
release that capital for productive use, but in such manner 
that the owners may get the use of it without disturbing the 
security of their use and possession of the land, and that 
this vast sum may in the ordinary course of business flow 
out to expend itself in the purchase of supplies from cities 
so that the cities will no longer be obliged to carry the agri¬ 
cultural industry as a dead weight and burden upon them. 
We know that if the singletax is imposed that it will 
destroy the greater part of the value of this agricultural, 
mineral and forest land, and cause many times the amount 
of the value taken from these lands to attach to urban 
sites. We perceive that the value of this land is merely the 
value of a mortgage upon all the industries, rural and 
urban, of the entire country which holds in its pledge twice 
as much capital as it calls for; that by releasing for pro¬ 
ductive uses the fund thus imprisoned one hundred million 
dollars’ worth of credit is added to the productive capital 
of the Nation. Knowing this, we propose to prepare to levy 
the real singletax, the tax on urban rents, not the Ricardian 
Singletax of Henry George. 

The first step in this process will be to issue to the owners 
of all non-urban lands, the value of which will be destroyed 
by the singletax, debentures of the United States by which 
a credit, equal to the annual assessed rental value, will be 
advanced annually for 25 years. This will constitute a 25 
years’ purchase. There will be given to the owner of the 
land, or to the mortgagee of such lands under proper condi- 


UNITED STATES IMPROVEMENT BONDS 


165 


tions, the annual credit equal to its present rental value, or 
in case of lands withheld from use, to an assessed rental 
value based upon its present cash selling value. These 
bonds should be serially numbered and issued to the owners 
of tracts named in them, so as to be identified. The bonds 
or debentures are not to be assignable except under condi¬ 
tions provided, for they will bear on their face the statement 
that they are ‘ ‘ The Improvement Bonds of the United 
States’’ issued for the particular purpose of releasing for 
productive use the capital now imprisoned in the value of 
the agricultural, mineral and forest lands. The beneficiary 
named in the bonds, or his heir or assigns, will not receive 
the money directly that is called for by the bond. But in 
every county an expert agronomist and Federal official will 
be placed whose duty it will be to determine what particular 
expenditures may be made of the fund thus provided by the 
Government. The beneficiary named in the bond may elect 
to improve his own land or any other land; it will be merely 
the duty of the agronomist to see to it that the proposed 
expenditure is a fitting one. Thus the owners of the land 
will have paid out for their use capital equal to their 
annual rent for 25 years which they will not be allowed to 
expend in any other than a productive manner. During 
this period, while the Government is assisting them in the 
improvement of their lands, the agronomists will necessarily 
instruct the farmers in the art of scientific agriculture, so 
that when the period is completed their farms will all be 
most highly improved, and they will also have been made in 
their skill and efficiency equal to the skilled artisans and 
professionals of urban life. The farmers will of necessity 
be compelled ‘Ho go to school” and all of them at once, for 
otherwise they cannot get the fund that is provided for 
them. At the end of the 25 years the man who now owns 


166 


PUBLIC POLICY 


100 acres, worth $5,000 as a cleared site, will have received 
in credit $7,500 which will have been all invested in perma¬ 
nent and useful improvements under the direction of the 
most skilled and competent directors. His efficiency will 
have been increased, and that value which was formerly in 
his land will now be a value working for him in the vastly 
increased utility of his improvements as well as in his newly 
acquired skill and knowledge. 

After these preliminary arrangements have been made 
THE SINGLETAX will be levied as a tax equal to the annual 
rent upon the unused and unimproved agricultural lands — 
the improved agricultural lands being exempt. This distinc¬ 
tion is made for the purpose of forcing the immediate sale 
and disposition of all unused land. In the case of very 
imperfectly used land some penalty in the nature of a tax 
may also be imposed,—but no attempt will be made to levy 
the SINGLETAX on improved and cultivated land. Then the 
value of the greater part of the agricultural land will dis¬ 
appear as the value is ruthlessly taxed out of the unim¬ 
proved land and the huge tracts are thrown on the Market. 
Except for the mechanism of these bonds this value would 
have had no way of appearing in the Market when the 
releasing tax severed the legal restrictions which hold it 
where it now is. The issuance of the bonds, however, pre¬ 
serves all individual credits, mortgages and pledges, so that 
the institution of the singletax would not cause the loss of 
credit to any industrial factor. Immediately with the ex¬ 
penditure of the credit represented by the bonds would come 
the tremendous demand upon the industries of cities for 
supplies. The competition of superior methods would cause 
them to tender a rapidly increasing sum for the privilege of 
exclusion and the ground rent of urban sites would rapidly 
rise. This rise would be based upon the calculations of both 


UNITED STATES IMPROVEMENT BONDS 


167 


present and future business based on the certainty of the 
credit being and about to be expended for the period of 25 
years. It would also be based on the fact that the disap¬ 
pearance of the withholding fictitious value of the agricul¬ 
tural lands would divert vast sums to productive use upon 
them which otherwise would have been expended in buying 
or renting them, and other sums which would not have been 
expended at all. That is, the sum now annually paid out 
for the mere rent of the land available for cultivation will 
be expended in improving the agricultural area plus the 
sum paid out by the Government as the credit represented 
by the bonds. 

The present value of urban lots is much in excess of the 
value of all non-urban lands and that excess is increasing. 
From the ground rent of urban lots there would be, on the 
first imposition of the singletax, a revenue amply sufficient 
to meet the accruing obligations of the bonds. But this 
ground rent first collected by the singletax would be 
merely the present ground rent of the urban lots and would 
not include any of the increase in their value resulting 
from the destruction of the value of the agricultural lands 
and the issuance of the bonds. Upon the first levy of the 
SINGLETAX all the increase, or Rise in Rent, would become 
the property of the owners of the sites. The revenue thus 
derived, while it would be sufficient to redeem the bonds, 
would not be sufficient for the expenses of the Federal, 
State and local governments, and for some time it would 
be necessary to supplement the taxation of land values by 
other forms of taxation, the Income Tax on the owners of 
the urban sites being the most just and least oppressive. 
For the value of these lots would jump to staggering figures 
as the vast flood of hitherto unused capital rushed in the 
Market and these persons would be unjustly and enormously 


168 


PUBLIC POLICY 


enriched. The speculative enhancement in selling value of 
all urban property under these conditions would enable all 
weak holders, unable to improve them, to dispose of their 
lots at a profit. 

The agricultural lands being valueless the farmers would 
be exempt from taxation. If there were lands in the country 
which, at the beginning of the second decennial period, 
would still command a price, it would be because the result¬ 
ing conditions had enhanced their value; and as in the case 
of city lots, they would command a price-lowering rent. 
But these would be few in number and would rapidly dimin¬ 
ish as the capital invested in the improvement of other lands 
brought all agricultural land to a common state of utility. 
The farmer would have his land and the value of his land 
(although he would have the latter in another form) and he 
would be released from all taxation, both direct and indi¬ 
rect. And immediately the interests controlling transporta¬ 
tion and the manufacture and sale of the products of the 
superior or controlling industrial functions (the so-called 
“Trusts”) would visibly become also, what they are essen¬ 
tially in fact, price-lowering monopolists, for they could no 
longer increase their market by artificially raising the prices 
of their products to cut off the drainage of capital into the 
morass of agricultural land value. They would be obliged 
to make their profits legitimately by the fall in price. 
Then the farmer would get better and cheaper transporta¬ 
tion ; everything that he would buy would become cheaper. 
The cities would inundate him with goods, and the agricul¬ 
tural population, skilled, efficient and supplied with abun¬ 
dant capital and land, would pour their reciprocal gifts into 
the laps of the cities which were their benefactors. 

In a similar way we may suppose that the owners of 
raineral and forest lands would be provided with compensa- 


UNITED STATES IMPEOVEMENT BONDS 


169 


tion and instruction. For every coal mine in use there are 
five just as good or better wholly unused. We want cheap 
fuel, steel and glass, copper, zinc and other of the great 
mineral stores of nature, and we should see to it that the 
great forest area is cared for, and that all our national 
resources are conserved. 

By this means, we can release the vast fund of unused 
credit and forever abolish poverty, panics, uncertainty and 
economic distress from the world. The European nations 
could not hold their populations unless they followed our 
example. The wage-standard is the measure of the worth 
of any civilization; measured by this we are not much better 
off than the Europeans when they are at peace. 

22. The Method Of Assessment Of The Singletax 
By Which The Improvement Bonds Of The United States 
May Be Secured. —The method of assessment of the 
SINGLETAX is simply the method of determining The Accrued 
Increment. I will assume that after ten years, or a decen¬ 
nial period, the benefits of the Fall in Price have been so 
digested by the existing industries that the Rise in Rent, 
or the Accruing Increment of the tenth year before, has 
become standardized and incorporated in the Accrued Incre¬ 
ment. To assess the tax it will only be necessary to make an 
annual public record of the value paid for each year by ten¬ 
ants (or an estimate of the annual present value for owners 
using their own property). This rent (which includes the 
accrued as well as the accruing increments) ten years after¬ 
wards becomes the amount of the annual tax,—the rent 
actually paid by the tenant to the owner for the year 1916 
becoming the amount of the tax in the year 1926; the 
amount paid by the tenant to the owner for the year 1917 
becoming the tax in 1927, and so on. Thus the officials who 
will be called upon to determine the amount to be paid in 


170 


PUBLIC POLICY 


1926 will only have to ascertain what the actual rent was 
that was paid in 1916, and they will have ten years to do it 
in. By this time all disputes could have been litigated to a 
conclusion. The officials of government will have nothing 
whatever to do with determining the value of Jthe lot, or 
how much should be paid as a tax upon it, once the system 
is put in operation. That will be spontaneously zdeter¬ 
mined by the parties chiefly concerned about it,—the land-^ 
lord and the tenant whose opposing self-interests .alone 
adjust and flx it. For we know that an honest assessor, 
who is at the same time accurate, is impossible, and the 
only assessment which could be made the basis of the 
SINGLETAX must be the assessment made by the returns, 
and in which the Rise of the Accruing Increment, subject 
to legitimate appropriation * by the landlord, increases the 
selling value of the land. 

For when the singletax is simultaneously levied upon all 
the urban and unimproved lands of the United States which 
have a rental value, rent will only be paid to exclude those 
uses not excluded by the fall in price and rise in wage. 
Only in cities are sites for which the superior uses would 
compete for the advantages to be derived from the saving 
of time and expense in being near to each other and to their 
Market. With the rise in wage will come the increasing 
RISE in rent, which under the singletax will greatly 
exceed the total annual rent now collected by the owners of 
urban sites and which will increase with every increase of 
the Accrued Increment. For the Accrued Increment is the 
stabilization of all values; by it the Fall in Price is main¬ 
tained at the maximum so that this form of gain formerly 
derived from ancient excluded methods is not lost, and by 
it the Kise in Wage, resulting from the Fall in Price, 
advances proportionately. As the Rise in Wage cannot 


UNITED STATES IMPROVEMENT BONDS 


171 


occur except by the continuous exclusion of inferior meth¬ 
ods, the Rise in Rent of urban lots must necessarily be 
constant, and progress at an accelerating rate. 

For a period of ten years, after the first institution of the 
PRIMARY SINGLETAX, it would be necessary to supplement the 
revenue derived from it by an income tax, or more particu¬ 
larly, the tax on the incomes of landlords collecting urban 
ground rent, for during this period the line of demarcation 
between the accrued and the accruing increments would not 
be clearly defined. But after the period of assessment had 
closed (which I merely assume to be a decennial period) 
then the singletax will properly begin to fall. If we say 
that the primary singletax is assessed in the year 1916, the 
amount collected by it will not change for 10 years. In the 
meantime, by reason of the throwing open to use of all the 
unused agricultural, mineral and forest areas of thje Nation, 
and by reason of actual and prospective expenditure of 
$75,000,000,000 in improving the country there will imme¬ 
diately attach for the year 1917 a Rise in Rent or speculative 
increase which the landlord will collect. Next year he will 
collect another increase and so on; it will be ten years before 
the PRIMARY SINGLETAX will have arrived to the point where 
it will be just ten years behind the Accruing Increment. 
For in the year 1927 the tax will take as the accrued incre¬ 
ment the original Primary Singletax assessed in the terms 
of its present value plus the Rise in Rent of 1917. During 
this ten years the landlord will have his rent leaping for¬ 
ward in giant strides, while his tax on ground rents will 
remain constant at the old figures that it was in the state 
of minimum, interrupted increasing returns which now 
exists. It would be the same to him as if he were now called 
on to pay the taxes assessed against his lot in the days when 
the great city was a village. 


172 


PUBLIC POLICY 


23. The United States Goes To War. Government, as 
one.of the three primary divisions of useful work, arises 
out of that work which coordinates the activities of the 
groups engaged in service and industry, according to the 
principle of functional control. In the act of coordinating 
the activities of these groups, the work of Government, 
by the selection and rejection of existing group opinions, 
forms Public Opinion as that which it will enforce as 
Public Policy. The policy which government seeks to en¬ 
force will be that which is required by the work which 
most contributes, under existing conditions, to the im¬ 
provement of method, so that the roots of all governmental 
policies are always deeply embedded in these sources of 
betterment. When this Public Policy rises to assert itself 
it employs all the organs of publicity and makes use of 
every moral, intellectual, industrial and physical force to 
coordinate all social activities. Although service, indus¬ 
try and GOVERNMENT are each in their proper fields sov¬ 
ereign and each command the whole of the forces of so¬ 
ciety, they severally do this each in their own way, but 
GOVERNMENT acts by the manufacture and enforcement of 
Public Policy. Consequently, government is much more, 
than the act of applying physical force to the enemies of 
public order. It is the act by which moral, intellectual and 
industrial, as well as physical force is employed for a single 
sovereign and controlling purpose. In proportion as gov¬ 
ernment fails to wield the moral and intellectual forces 
of Civilization, it must employ physical force and corre¬ 
spondingly draw upon or deplete and disorganize the ex¬ 
isting financial and industrial activities. An efficient gov¬ 
ernment must necessarily be one which at all points will 
be prepared to exert the whole of the forces of Civilization 
according to the necessary requirements of Public Policy, 


UNITED STATES IMPBOVEMENT BONDS I73 

and, as such, must be prepared to wield its physical forces 
with modern military and naval effectiveness. Whatever 
is worth doing at all is worth doing well; hence, if we are 
to have an army and navy these arms of the government 
should be powerful enough to be feared by our enemies 
and respected by our friends. 

But as GOVERNMENT makes war in the last extremity by 
the employment of physical force, so it also continually 
wages a war of opinions—an intellectual and spiritual war 
—by the example and collective influence of its institu¬ 
tions. For 140 years the people of the United States 
have waged this sort of a war upon the European estab¬ 
lishments and have sought to overthrow them and to sub¬ 
due them to the similitude of its own institutions. We 
have opposed to the European standard of living a better 
standard and to the European caste system, the unlimited 
field of industrial and social opportunity, having barred 
the foreign-born only to the Presidency itself. Thus we 
have been fighting, for everything must thus fight to main¬ 
tain its existence, but in this sort of a war we have in¬ 
vaded no human rights and have made no peoples hostile 
to us. By our example we have shown that a confederacy, 
and then an organic Union, of sovereign states is possible 
and practical when the principles of association and gov¬ 
ernment of these states is that sort of Public Policy which 
arises from the functional subordination of necessary acts, 
i. e., the Public Policy of Useful Work. If the European 
nations had been properly solicitous for their own good 
they would, like our colonies, have first formed a Confed¬ 
eracy, and then the Public Policy of Useful Work would 
have welded them into a Union as strong and as stable in 
its equilibrium as our own. 

The Public Policy of Europe has been the Public Policy 


174 


PUBLIC POLICY 


of Useless Work, its instruments have been diplomats, 
liars and spies in times of peace, and, as the inevitable out¬ 
come of these instruments, finally, armies, big cannon, sub¬ 
marines and gas machines. It is by such means that these 
misguided people seek their peace, and the utmost they 
can expect is to have their social equilibrium balanced on 
the points of bayonets. But peace is the uninterrupted 
continuity of all Useful Work in service, industry and 
GOVERNMENT; it is not to he obtained in any other way 
than hy that sort of Public Policy which we, in a crude 
and unsatisfactory way, employ. 

We also have been fighting for peace. There are forces 
constantly warring upon Useful Work, and these forces 
must be eliminated. The enemies of the nations are the 
causes invisible to them. The enemies of the Germanic 
Alliance are not the populations with which they are in 
open war; neither are the enemies of the Franco-British- 
Russian Alliance the starving populations of Germany. 
The cause lies in the force restraining all these people 
from adopting the obvious policy which prompted the 
American colonies to unite for their common welfare. That 
force is the Ricardian reaction against the doctrines of 
the French Revolution when the excesses of the latter, as 
the Revolution became subject to the degrading influences 
of the Marginal Intelligence of the Ward-Clubs of Paris, 
prejudiced all Europe against the popxdar agitation and 
discussion of the natural laws relating to social growth and 
economics. The Ricardian sociology ha^ continuously 
taught the rulers and publicists of the European states that, 
by reason of diminishing returns the interests of their pop- 
idations were adverse to each other and has made the nat¬ 
ural and obvious course suggested by the example of the 
United States impossible and impractical to them. ‘^The 


UNITED STATES IMPROVEMENT BONDS 


175 


Disunited States of Europe’’ suffer from this cause alone. 
Although, doubtless, very few of the millions engaged in 
this war have ever heard of Ricardianism, or its formulas 
based on the assumption of diminishing returns, the Ricar¬ 
dian conception of sociology has controlled all the public 
men of Europe, and in its lies and sophistries they have 
been trained. Hence the real enemy which the Europeans 
are fighting is the maUgnant restraining check of the su¬ 
perstitions of Ricardian economics, represented hy the 
teaching authority of a few feeble old men of harmless, 
inconsequential appearance and intellect who are en¬ 
gaged in perverting the minds of the youths of these 
nations. If Europe, at the cost of one-half of its fighting 
men and with the loss of all its tangible goods, is able to 
shake off its back these strangling representations of ^*The 
Old Man of the Sea,^^ the Europeans will do well. 

The object, end, and purpose of Civilization is to realize 
the meaning and worth of life. What is life worth ? It is 
to that end that service suffers, industry toils and gov¬ 
ernment plans. In that war of purposes and ideas which 
long precedes the open outbreaks of physical disturbance 
when nations rise against nations, it is our duty to play 
an heroic part in elevating the standards of Civilization 
by elevating the Standards of Life. This is to be accom¬ 
plished, not by mere words or intentions alone. First 
comes the ^^good thought,^’ then the *^good luord,’^ then 
the good deed,^^ as the Avesta says. The good thought 
may be vanity, the ^^good word” may be a lie, but the 
good deed” speaks for itself. 

All men can understand and appreciate that the civ¬ 
ilization paying the highest wage is, other things equal, 
the best; and, that the policies which secure that result 
are the best. To each civilization there may be applied 


176 


PUBLIC POLICY 


three infallible tests as to its worth, viz., the test of serv¬ 
ice, the test of industry and the test of government. But 
the easiest of these is the test of industry. 

In the year A. D. 1500 the daily wage of the unskilled 
laborer would buy more of the necessities of life than $3.00 
would now buy. But what would the wages of such labor 
now be worth, if all the unused purchasing power—^re¬ 
sulting from modern improvements—now absorbed by the 
useless value attaching to non-urban lands, was released 
for productive expenditure by the issue of The Improve¬ 
ment Bonds of the United States? Seventy-five billion 
dollars is an amount, perhaps, too great for individual 
comprehension. It will be understood better as the cap¬ 
italization of the annual sum diverted from the Inde¬ 
terminate Wage or Profit (out of which all Fixed Wages 
are derived) of all the industries of the United States. It 
is an amount equal to the entire cost of the European War, 
lying concealed and unproductive in the worse than use¬ 
less value of our non-urban lands, which if released for 
productive expenditure would heal the wounds of Europe, 
knit the nations together in the enduring bonds of pros¬ 
perous friendship, enrich ourselves beyond our most hope¬ 
ful expectations, and forever banish from the Earth all 
wars of industrial or economic origin. By permitting this 
vast sum to be diverted from productive use, we are not 
only guilty of the greatest folly in a business sense, and 
are failing to play the part which the United States as a 
nation has had assigned to it, but the act is also as great 
a crime against Industry, the material foundation of Civ¬ 
ilization, as the vicious expenditure of a like sum in the 
European War is a crime against Civilization itself. Let 
us hope that the leaders of the great parties, about to in¬ 
terrogate Public Opinion, will counsel the people of the 
United States to mobilize their vast forces for an unparal- 
elled, intelligent and heroic assault upon War itself by the 
removal of the economic causes which lead to War. 





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